[IP] "Let them eat megabits".
[ This is from the New Economy Policy Forum of the Financial Times. I have
just been asked to join the group replacing Larry Lessig and have
accepted djf]
"Exclusively to FT.com, Lawrence Lessig, Richard Epstein, Eli Noam and
Thomas Hazlett (debate the regulatory and legal issues generated by - and
also shaping - the high-tech industries.
The forum runs on a fortnightly cycle, starting with a long article by one
of the contributors, followed by responses from one or more of the others. "
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Wed, 10 Dec 2003 03:33:27 -0800
From: hudson@xxxxxxxxx
Subject: For IP list
To: dave@xxxxxxxxxx
Hi Dave: I'm at WSIS in Geneva(are you?) { no not there unfortunately djf]
I had an article published in FT.com today that I thought would interest
IP'ers. It's in response to Eli Noam's "Let them eat megabits".
The URL is
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&cid=1069493486004&p=1020498309075#hudson
Heather Hudson
Professor Heather E. Hudson
Director, Telecommunications Management and Policy Program
School of Business and Management
University of San Francisco
Phone: 415-422-6642; fax: 415-422-2502;
email: hudson@xxxxxxxxx
[]
Eli Noam: Let them eat megabits
By Eli Noam
Published: November 26 2003 15:32 | Last Updated: December 9 2003 16:21
In two weeks Geneva will host the World Summit on the Information Society
(WSIS). Government and business leaders will converge from around the
globe, and no doubt proclaim the importance of spreading the availability
of high-speed internet access - "broadband" - to the populations of
developing countries. Broadband is regarded as necessary to prevent poor
people falling behind economically and socially. But is that true, and
should broadband therefore be a priority for developing countries?
Politics and economics are about choices. Of course it is preferable to
have an internet connection that runs at 1 megabit per second rather than a
slow dial-up service that might be 100 times slower. But such an upgrade
costs about $250 of new investment and labour per existing internet
subscriber. Is this money well spent? At the same time, few people in poor
countries have phone connectivity of any kind. Two-thirds of the world?s
population live in countries with fewer than 10 phone connections per 100
people. It costs about $1,000 to wire up a new user; wireless can bring
down the cost somewhat. Thus, the money for about three broadband upgrades
could instead support one basic connection of a new user to a network.
Telecommunications investments have been shown to have large multiplier
effects. But should broadband or basic connectivity receive priority when
investment money - whether public or private - is scarce, as it is now with
the bursting of the telecoms and internet bubbles? Broadband benefits the
urban professional classes; universal service benefits the rural areas and
the poor. Faced with the unpalatable choice, and with the high-tech siren
songs of equipment vendors and network companies, most policymakers will
simply deny its existence, or defer to technology fixes as overcoming them.
But avoiding a choice usually means making an imperfect one.
Even in rich countries, the migration to broadband has taken a definite
historic path. First, basic telecom connectivity for everyone was achieved,
a process that took a century, until the 1970s. Wireless mobile
communications followed, and their universality is now in striking
distance. Narrowband internet started in earnest with the web in the early
1990s, and has now reached near saturation for those likely to use it.
Broadband internet began a few years ago and has reached now 6.9 per cent
of the population in America and 2.3 per cent in the UK. Several countries,
most notably South Korea, have higher penetrations (21.4 per cent). In
other words, rich countries first expanded their basic services across
society, and only then embarked on bursts of upgrades.
[]
If residential broadband were to become a secondary telecom priority for
poor countries, would they suffer for it? Not really. First, the expanding
base of basic phone users would also increase the number of narrowband
internet users. The extra speed of broadband is convenient but not
essential. There are few things one could not do on narrowband outside its
use for music and video. Yes, there are important applications, such as
tele-medicine and distance education. For those, broadband may be justified
in institutional settings, and they could grow into shared community
high-speed access points. But that does not mean that broadband is
essential as a residential service.
Second, the upgrade of the infrastructure to broadband, difficult as it is,
is simple in comparison with the required improvements in the applications,
content, and services that would operate on the faster network. Such
applications are therefore likely to be dominated by providers in rich
countries, which benefit from economies of scale and the huge drop in
international communications prices, and which could therefore access the
prosperous pockets of poor countries more easily. In contrast, domestic
industries and content would develop better in the less demanding
narrowband environment, in which they can access a larger number of small
users whose needs are more familiar to them than to global companies.
The conclusion is therefore that the priority of poor countries should be
to expand basic network connectivity, both wireline and wireless, through
public investments and market structures that encourage private investment.
It should also be to develop a base of narrowband applications and content
providers that can later compete on the broadband platforms that follow.
It may be comforting to declare that one can do it all, widening service
well as deepening it. This might be true one day. Until then, universal
connectivity rather than broadband is the better but more boring strategy
for development.
The writer is professor of economics and finance at Columbia University and
director of its Columbia Institute for Tele-Information
...........................................................................................................................................
Heather E. Hudson: ?Information is the key to all doors??
My colleague Eli Noam made some seductive arguments under a catchy headline
about the World Summit on the Information Society being held this week in
Geneva, but many of his assumptions were wrong. The choices for the
developing world are not between bits and butter, nor even between voice
and data.
The headline above quotes a Malian woman who wrote in the logbook of a
telecentre in Timbuktu: ?L?information est la clé de toutes les portes?.
She was exactly right. The underlying principle of the WSIS is the
importance of information in development.
A doctor interviewed in Timbuktu before there was internet access noted:
?Information is the fuel of medicine. Here we have none. Year by year we
are falling behind.? He was one of the first to learn to send email and
search the web once the telecentre opened.
Of course, not everyone in developing countries is likely to be able to use
the internet. Some development pundits have argued that provision of
text-based services should wait until literacy rates are much higher. Yet
when this issue was raised by one funding agency, a Ugandan member of
parliament responded: ?My father sent many telegrams in his life. My father
could not read or write.?
A scribe had written down his father?s messages and read him the replies.
Similarly, facilitators can help illiterates to communicate and track down
information using the internet. Unable to get any local help to attack a
pest destroying their potato crop, farmers in Ecuador turned to just such
an ?infomediary.? She posted their problem on several internet newsgroups
and within days had advice that saved their crop.
Although resources are always limited, expanding basic telephone service
(often called POTS for plain old telephone service) and increasing access
to broadband are not mutually exclusive options. The explosive growth of
wireless, due to competition-fostered innovation (such as cheaper pricing
and prepaid phone cards), is largely bridging the POTS gap. There are now
more wireless than fixed lines in sub-Saharan Africa and most other
developing regions. For many subscribers in the developing world, their
cell phone is their first and only phone. Public payphones and wireless
resale by entrepreneurs such as rural women in Bangladesh and the
Philippines provide access to those who cannot afford their own phones.
No one is talking about broadband to every hut. But it is possible to
provide broadband to every settlement, for use in schools or community
centres such as telecentres, post offices, libraries or cybercafes. The
emphasis is on community, institutional and organisational access
(sometimes called ?universal access? - which I would define as available,
affordable and reliable service.) Pricing is, of course, critical. Some
internet service providers in developing countries must charge very high
rates because of the exorbitant prices they pay to monopoly operators for
connectivity. And service quality is also important. Ask rural students
what it is like to try surfing the Web on one single noisy dial-up line for
the whole school.
In some areas, broadband may be added through upgrades to existing wireless
networks (for so-called 2.5G and eventually 3G or third generation
services). In other regions, broadband may be delivered via technologies
such as VSATs (small satellite terminals) and WiFi (fixed wireless to cover
villages or neighbourhoods).
Connectivity and content development are also not mutually exclusive. Many
development agencies are in fact putting more support into content than
into infrastructure by aiding preparation of relevant material in local
languages. This internet content may also be disseminated through other
media such as local radio stations. If we get the policy right so that the
telecommunications sector has incentives to meet demand as it is now doing
for wireless, governments and international organisations should not have
to put their funds into connectivity.
Delegates at the WSIS come from the Arctic and sub-Arctic as well as from
developing regions of Africa, the Asia-Pacific and Latin America. There is
a connection between remote North and developing South. Thousands of rural
communities in Russia do not yet have telephone service. On the positive
side, innovative projects in northern Canada and Alaska are using the
internet for distance education and practical telemedicine for native
villages. In fact, almost all village schools in Alaska have high-speed
internet access, thanks to a US Universal Service Fund known as the E-Rate
that provides subsidised internet access to schools, libraries and rural
health centres.
To eliminate the barriers of distance in remote and developing regions,
many important problems remain to be solved. To my mind, some of the more
interesting issues include:
? Are there lessons from the wireless explosion that show how to tap
markets for other services, including broadband access in developing countries?
? Can substitutes for email such as SMS (short message service) extend the
functionality of the wireless network without requiring more bandwidth?
? Can sectoral policies also serve to extend broadband access? For example,
a national policy that mandates internet access for schools may result in
the schools becoming ?anchor tenants? that can serve as bases to extend the
internet to other local clients such as small businesses, public services
and NGOs (nongovernmental organisations) via WiFi or other cost-effective
wireless technologies.
? Are there lessons from industrialised countries, such as the targeted
E-Rate subsidy, rural wireless internet service providers (WISPs) and
public-private partnerships, that are relevant for developing countries?
The real danger is that the WSIS may not address these issues, but turn out
to be only a talking shop full of lofty rhetoric without specifics, or
?motherhood and muktuk?, as Arctic villagers might say.
The writer is director of the telecommunications management and policy
programme at the University of San Francisco, and is currently a Sloan
Industry Fellow at the Columbia Institute for Tele-Information
...........................................................................................................................................
Taylor Reynolds: Let us all eat megabytes
Professor Eli Noam correctly points out that politics and economics are
indeed about choices. However, the simple traditional guns and butter
trade-off, so popular in economics, neglects the complex nature of
telecommunications, and broadband in particular. The beauty of broadband in
the developing world is that the installation of traditional phone service
and broadband is not an either/or decision. Rather, broadband serves as the
backbone network that can transport voice, data, and video signals - often
referred to as the "triple play". Broadband offers developing economies the
chance to build one network that can be used for these three different and
valuable services and makes efficient use of a country?s scarce resources.
Contrary to the suggestions of Prof Noam, no economy (developing or
developed) should be investing in a network that can only be used to
transport voice. If new lines (or wireless networks) are under
construction, they should always be capable of handling other high-speed
traffic as well.
This new telecommunications era is an exciting time in developing economies
because new technologies have allowed many economies to ?leapfrog? over
their more developed counterparts. This phenomenon was first shown by the
strong take-up of mobile phones around the world, especially in areas that
were not as well served by fixed-line telephony. Using mobile phone
penetration as an example, Hungary (67.60), Estonia (65.02), the Slovak
Republic (54.36), and Croatia (53.50) all had higher mobile phone
penetration than the United States (48.81) in 2002. Mobile telephony was
only the start; broadband could be next.
A new wave of wireless and fibre technologies may allow developing
economies to inexpensively build new infrastructure that far surpasses the
early-20th-century copper networks still heavily in use throughout the
developed world. Just as Britain was slow to phase out gas street lamps,
operators in many developed economies are unwilling to invest in newer
technologies as long as there is still some life left in copper. Developing
economies are not as tied down to an inefficient legacy network and for
this very reason do not need to, and should not follow the path of
developed economies. They should make every possible use of fibre and
wireless technologies when planning their new networks.
One of the most promising technologies for the developing world will be the
wireless standard WiMAX, which should be able to send huge amounts of data
(70 Mbit/s - comparable to 1250 dial-up internet connections or 7292 voice
calls) over a range of 50 kilometers. Projects in some developing
economies, such as Bhutan, have already made use of slower and shorter
Wi-Fi wireless connections to connect distant villages with simple
telephone services. If Wi-Fi connections are already being used to form
critical telecommunications infrastructure in the developing world, WiMAX?s
much faster and longer-range connection will provide much better
connectivity to many more people. Indeed, the combination of WiMAX to the
village and then Wi-Fi to the users opens the possibility of voice, data,
and video to regions that have never even had traditional phone services.
There are few reasons to build a simple phone network when new networks can
offer voice, data, and video for the same costs or less.
Prof Noam?s claim that broadband benefits the urban professional class and
universal phone service benefits the poor is incorrect and propagates
misinformation about the needs of the developing world. Mexico recognizes
the needs of all its citizens to have access to broadband and is a world
leader in working to build community access centers throughout the country.
Mexico?s plan is visionary because in addition to supplying broadband to
these centers in remote areas, the network becomes the backbone for a new
local phone network as well.
The timing of the World Summit on the Information Society is opportune
because the world may be on the brink of another digital divide. However,
this digital divide can be avoided. Policy makers in the developing world
have the opportunity to plan for one network that can provide a range of
ICT access, not just voice, to their populations in one fell swoop. The
summit will also serve as a forum where policymakers from around the world
can converge and find innovative solutions to other real-world ICT
problems. We would submit that constructing a world where everyone has
access to the vast knowledge resources of the world is not an act of
generosity but ultimately, a demonstration of common sense. Let us all eat
megabytes.
The writer is a policy analyst for the International Telecommunication
Union (United Nations Agency for Telecommunications)
[]
-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting-people/