Dear Colleagues,
I appreciate the opportunity to make some comments on these very
important questions. I am Jim Forster, a Distinguished Engineer with
Cisco Systems. Most of my time with cisco has been in product
development; recently I have been involved with some projects and policy
issues for increasing Internet Access in the Least Developed Countries.
On 10/31/05, Kerry McNamara wrote:
> (a) Do ICTs Matter to the Poor?
I think so, but would like to hear other's thoughts. I think of
communication as a basic human need. What can be more important
during difficult times than hearing the sound of your mother's voice, or
your child's voice? Studies show that the poor spend 3-5% of their
income on communication, as the alternative is travel. There are also
plenty of stories about the benefits to farmers of getting current
market prices, etc.
> (b) Do National ICT Strategies Matter?
> (c) Do Policy and Regulation Matter?
I'll consider these together. I do think they matter, but I think the
policies should not be detailed plans. They should mostly be about
enabling enabling private sector and entrepreneurial activities, and
about ensuring that entities with significant market power, such as
incumbent telecoms, do not abuse their market position.
Hernando de Soto's book, "The Other Path" is very interesting and
somewhat relevant to telecom policy issues. One reviewer wrote this
about the book: "Of all the terrorist movements since World War
II...only one was decisively defeated on the battleground of ideas.
Sendero Luminoso, the Shining Path, arose in Peru in 1980....The task of
making the Shining Path politically irrelevant was accomplished
primarily by ideological means. Hernando de Soto offered an alternative
vision of Peru's poor. Rather than see them as the proletariat, he
showed that they were in fact budding entrepreneurs whose greatest
desire was not to bring down the market economy but to join it. "
Here's a quote from the preface that's relevant to this discussion:
"Mercantilism can be defined as the supply and demand for monopoly
rights by means of laws, regulations, subsidies, taxes, and
licenses....Mercantilism is a politicized and bureaucratized environment
dominated by privileged redistributive combines that prevailed in Europe
before and during the Industrial Revolution before the rise of
democratic capitalism...Buried by the triumph of capitalism in the West,
mercantilism nevertheless continues to be the predominate economic
system in twenty-first century Peru".
In thinking about policy and advocating well-intentioned changes, we
must be careful to not create a bureaucratized or politicized
environment. In some cases we have that already, perhaps a legacy of
colonial bureaucracies, and it can be a tremendous drag on moving into
the future. Over the last couple decades most developed countries have
benefited from a liberalized or de-regulated telecom polices. These
benefits can extend to less developed counties as well if they make that
choice.
Cellular Telecom has been a huge success in the last 10 years in
developing countries. It is largely a private sector activity,
requiring significant capital and using the best high tech available,
but a key factor in its success is that with pre-pay it's easily used by
the informal, purely cash-based economy. Fixed-line telephony could
not make that leap and is limited to a small fraction of the economy.
Now that voice service is widespread and somewhat affordable, we must
look to adding data service for Internet Access. There is plenty of
technology, especially wireless, to enable a variety of infrastructure
buildouts at a very modest expense. One such technology can blanket an
area with broadband for about $50K per square mile. That's not exactly
cheap, but it's also about the same as a couple cars or trucks. So if
an economy can support a couple more trucks per square mile then it
could have broadband. If it is not prohibited by law or difficult to
obtain licenses.
> (d) Is Information Infrastructure a Public Good?
I think Information Infrastructure is a combination of public sector and
private sector activities. The Internet is thousands and thousands,
maybe millions, of separate networks. The result is definitely a
Public Good, but most of the Internet is private networks -- inside
businesses, schools, government buildings, apartment buildings, etc.
Some parts of the infrastructure can be easily and efficiently built by
the public sector, including national, regional, and even city- wide
backbones. Private sector enterprises can then use these backbones and
supply associated services.
A related issue involves the planned EASSy, a large-scale undersea fiber
optic cable for the east coast of Africa. These countries have no
international fiber connectivity, so it's an important and dearly needed
project. It's also about $300M. Under legacy policies, such as
prevailed with the SAT3 cable up the west coast of Africa, incumbent
telecoms would form a consortium, pool their finances, and look to world
financial entities like the World Bank to finance the rest. They could
then charge based on the value of the access (rather than the cost of
the facility), and make really good profits, as it is needed and there
would be only one. If public money (e.g., World Bank) is used, then I
think EASSy should be treated as a regulated public utility, with
cost-based pricing rather than value-based pricing. Otherwise, we, the
public, are making value judgments that cause more profits to be
available to some entities, and greater costs to others. That's the
mercantilism which I think we should avoid.
> (e) How can Local Innovation be Unleashed?
Lead, follow, or get out of the way. It depends on the circumstances.
-- Jim
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