Heather E. Hudson - 'Information is the key to all doors...'
Taylor Reynolds -  Let us all eat megabytes

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.

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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

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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

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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)