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Challenges to the Network:

Internet for Development, 1999

October 1999

Updated for Telecom 99

International telecommunication Union

Executive Summary

The advent of the Internet has been variously described as being as important for society as the development of the personal computer, the telephone or even the printing press. Yet, it is difficult to explain to those who have never used the Internet how it has the power to change lives, to create new businesses or to bring far-flung families closer together. For those who have started to use the Internet, and have gone beyond the initial frustrations associated with using any new technology, the Internet can do all these things and more.

But what can the Internet do for those regions of the world that have traditionally had only limited access to information and communication technologies? In theory, it can broaden and enhance access in developing nations because it offers a relatively cheap, versatile and technically efficient service that complements standard telephony. Furthermore, the Internet can allow businesses from developing nations to "leapfrog" into the development mainstream because Internet commerce will allow them to sell their wares and their services directly to customers. The Internet also offers considerable promise in facilitating the delivery of basic services, such as health and education, which are unevenly distributed at present. In this utopian view, the Internet is a way of levelling the playing-field and rendering the traditional disadvantages of the developing world—distance from markets, under-invested basic infrastructure, under-utilised capacity etc.,—less onerous.

But how realistic is this viewpoint? As with other new technologies, the Internet has the potential to support development activities, but, at the same time, it poses serious challenges and threats to pre-existing institutions. Is there, for example, a possible "cost" of the Internet for the public telecommunication operators (PTOs) of developing countries? In situations where resources are limited, are hospitals or schools in developing countries justified in paying for an Internet connection?

This report explores the current and likely impact of Internet development in a number of areas of social and economic concern, such as commerce, health, and education. It also analyses the features that makes the Internet different from existing communication services as well as its current diffusion status around the world. Finally, the report explores the Internet's potential impact on the PTOs of developing countries and highlights some of the regulatory challenges posed by the unique nature of this new and revolutionary technology.

1. What is so special about the Internet?

To address the question of what makes the Internet special, it is useful to consider a closely related question: what makes the Internet different from other telecommunication services, such as those which run over the public switched telephone network (PSTN)? There are arguably a number of differences.

Underlying technology: Both the Internet and the voice telephone network run over the essentially the same wires but the equipment attached to those wires, and the use made of them is different. On the Internet messages are broken down into digital "packets" of data which means that the wires can be used much more efficiently, to carry a much higher volume of information, at a lower cost.

Pricing: The PSTN has traditionally been priced on the basis of usage. By contrast, the dominant pricing principle for the Internet is flat-rate pricing. The model for wholesale pricing differs too. A service provider terminating a particular telephone call receives a fee for doing so. By contrast, on the Internet, there is almost no flow of cash on an end-to-end basis. On the telephone network, developing countries are net recipients of financial flows, but on the Internet they make net outpayments, for carriage of their traffic.

Traffic flows and value flows: In most telephone calls, the traffic flow is approximately even between the caller and the called party. But with web-browsing, the traffic flow is highly asymmetric with the main flow being towards the party which originated the call, who also gains most value from the call.

US-centric: Whether measured by the location of Internet users, websites or the direction of traffic flows, the United States takes the lion's share of the Internet. This is reflected too in the policy-making process in which all major decisions have been, until now, been effectively set by the United States.

Pace of diffusion: While it took the telephone close to 75 years to reach 50 million users, it has taken the World Wide Web (WWW) only four years to reach the same number (see Figure 1). On the supply side of the equation the number of international carriers grew to more than 1'500 in 1999, but this is still a long way behind the estimated 17'000 Internet Service Providers (ISPs) that have mushroomed around the world.

Figure 1: Internet growth: No longer exponential, but still mightily impressive

Internet host computers and growth rate, January 1990 - July 199 9, and compound annual growth rates, 1990-98

Note: For the left chart, the latest data is valid for mid-1998, not end-year. The growth rate shown are annualised rates.
Source: ITU World Telecommunication Indicators Database, Internet Software Consortium, Compaq, RIPE.

2. Internet in developing countries

On a global scale, Internet growth has been little short of phenomenal. The network has increased from 213 host computers and several thousand users in August 1981 to more than 56 million Internet hosts by July 1999 (Figure 2, left chart) supporting an estimated 190 million Internet users. Perhaps even more impressive is the number of countries connected to the global network. From just over twenty in 1990, there were more than 200 nations connected by July 1999. Though these figures are impressive, a closer look at Figure 2 (right chart) reveals the great disparities in Internet hosts between high and low income regions. For example there are almost as many hosts in France as there are in all of Latin America and the Caribbean, there are more hosts in three highly developed countries of the Asia-Pacific region (Australia, Japan and New Zealand) than all the other countries in the region combined and there are more hosts in New York than in all of Africa.

Figure 2: Growing but still unequal

Installed base of Internet hosts, January 1991 - July 1999, and distribution by region, July 1999

Note: In the left chart, data refer to January of the following year. A new method was used to calculate Internet hosts from January 1998 onwards. Data were adjusted, based on the new methodology, from January 1995. * LAC = Latin America and the Caribbean.

Source: ITU. Internet host data adapted from Internet Sortware Consortium and RIPE Countries connected data sourced from Internet Society.

The majority of Internet hosts are in developed countries, suggesting that wealth and education are major factors driving Internet diffusion. Profiles of Internet users confirm that they are, on average, wealthy and educated as well as young, urban, and male.

What are the barriers to increased Internet usage? The precise ranking of different obstacles differs, according to the level of economic and social development, but users around the world are unanimous in finding the price of Internet access to be a major constraint. Internet access prices for end users can be broken down into three components: hardware/software, Internet access provision and telephone service charges. In relative terms, the costs to get connected are much higher in developing countries. While prices may not differ drastically in absolute terms, there is a large gap between high and low income countries when costs relative to per capita income are considered (Figure 3).

A shortage of infrastructure, notably of telephone lines, is a further big obstacle to increasing Internet access in developing countries. The high visibility of the Internet and the growing awareness of the importance of Information and Communication Technology (ICT) for socio-economic development is driving policy changes aimed at increasing the supply of telephone networks. Countries are tackling this problem through a variety of options including granting incumbent operators more freedom to reinvest their earnings and attracting fresh investment from the private sector by selling shares in state-owned telephone companies, and/or by allowing new market entrants.

Availability of content, in an appropriate language also affects the diffusion of the Internet. After all if you cannot find content in your language and you do not read other languages, how can you use the Internet? According to research by the Internet Society, more than 80 per cent of web pages are in English, though only 57 per cent of Internet users have English as their mother tongue. One notable aspect is that the countries with the highest levels of access include a large number of islands. Overcoming physical and psychological isolation appears to be a major factor driving Internet usage. This may be good news for developing countries, which have often argued that they are economically isolated and suffer from a shortage of information.

Figure 3: Absolutely similar, relatively different

Monthly Internet access prices for the OECD, August 1996 and Africa, July 1998, US$

Note: Monthly access charge includes telephone call charges.

Source: OECD Communications Outlook 1997 and M. Jensen.

3. Internet for electronic commerce

The concept of electronic commerce (e-commerce) is not new. However, the rapid rise of the Internet has made the potential of e-commerce more promising. It is now widely stated that the Internet and e-commerce will transform traditional business and consumer life. By one estimate, Internet-based sales reached US$ 43 billion in 1998, and are expected to reach US$ 95 billion in 1999. Most analysts have revised upward their predictions for online business early next decade to between US$ 1 trillion and US$ 3 trillion. Growth rates are expected to be particularly high in Asia (Figure 4).

Figure 4: E-commerce revenue projections in Asia

1998 and 2001, selected countries

Note: IDC's revised projections for China's e-commerce revenues in 2002 total US$ 1.87, while South Korea is expected to generate US$ 2 billion.

Source: Left chart IDC, Market Forecast for Internet Commerce (October, 1997). Right chart IDC, as reported by CommerceNet.

The Internet enhances the possibility for developing and emerging economies to participate in the emerging digital economy. Internet-based electronic commerce is likely to promote economic growth and welfare in developing countries significantly. New export opportunities should attract new foreign and domestic investment and thereby enhance growth. Most large industrial companies in developing countries already use the Internet, and what is perhaps surprising is that a growing number of small and medium-sized firms are also becoming users.

Internet commerce has not penetrated all economic sectors equally. Sectors with high expected growth rates include: computer hardware and software, real estate, publishing & information services, finance, and Internet services. Tourism which is an increasingly important source of growth for developing countries, also looks set to be boosted by electronic commerce. Analysts estimate that the travel industry accounted for some 20-30 per cent of total online revenues in 1997. Online travel sales are expected to grow to almost US$ 30 billion by 2002. Financial services is another area of great potential growth in the online world and Internet banking is already available in many developing countries enabling customers to pay bills, check account balances, or transfer funds (see Figure 5, right chart).

Figure 5: Online shopping in Argentina and online banking in Mexico

What people buy over the Net in Argentina and why people use Internet banking in Mexico

Source: Secretaria de Comunicaciones de Argentina and Internet, banca y comercio electrónico, Grupo TeleLink, S.A. de C. V.

What does Internet commerce mean for firms? The benefits of e-commerce are certainly compelling. Internet commerce can substantially improve productivity by lowering transaction and production costs, facilitating market entry, improving customer service, extending geographical coverage and enabling a new potential source of revenue (Figure 6).

Although Internet commerce potential appears promising, many challenges still remain. Barriers to Internet commerce are to some extent the same as those for Internet use in general. But several of the challenges are specific to electronic commerce, and they include the need for a legal and financial framework for Internet transactions and the provision of market access and trade logistics. Developing countries aiming to promote electronic commerce would have to work, on the short term, on the both fronts—i.e., improving communication infrastructure and accessibility and adjusting the legal, financial, and logistic conditions to the new requirements of online trade. In the longer term, they would have to certainly address some of the underlying conditions for global commerce to flourish—such as improved education and computer skills.

Figure 6: What is good about the Internet? The corporate view

From the perspective of firms in developing countries (left chart) and global corporate interests (right chart)

Source: Left chart, International Finance Corporation (IFC) (see Figure 3.2). Right chart; Computerworld.

4. Internet for health

A young and healthy athlete was brought to the hospital in a critical situation. He was suffering from high fever, weakness and serious infection. Laboratory tests confirmed that the infection was necrotising fasciitis (commonly known as the "flesh-eating bacteria"). Urgent amputation of the leg seemed the only possible solution to stop the process and save his life, until one of the physicians recalled seeing an article that referred to new ways of treating limbs infected with necrotising fasciitis. After a quick consultation in MEDLINE—one of the most important medical database on the Internet—the doctors were able to find and retrieve the article and apply the procedure and treatment recommended. The young man was able to save both his life and his leg, and is back in athletics.

Of the 52 million deaths worldwide during 1996, over 40 million of them were in the developing world. More than 12 million of them were children under the age of five, most of which died from preventable causes. Many of these deaths could have been avoided and several of the problems faced by health professionals could be overcome if the adequate information was at hand when needed. But, information poverty is one of the most serious obstacles facing health professionals in the developing world.

For decades, developing nations have been well aware that meeting basic human needs—such as health and education—is not only essential to the well being of their population, but also a prerequisite to any economic development effort. The Internet, due to its peculiar technological and economic features—efficient digital technologies that can deliver in an interactive and asynchronous fashion data, text, images, and video at a low cost—brings new hope to developing nations.

In most developing countries, given the poor infrastructure and inadequate computing at both homes and public institutions, the likelihood of patient/doctor and/or patient/Internet-site consultation is slim. What is instead viable, and could have a major impact on health services provided in developing countries, is consultation among health professionals over the Internet and health professionals to Internet-site consultation.

In Ginnack, for example, a remote island village on the Gambia river—two nurses, Rosemary Sturdy and Marlous Kok, combine a digital camera and a laptop to diagnose ailments and keep various sickness at bay in the local community. Sturdy and Kok use the digital camera to take pictures of visible signs, download them to the laptop and take them to Banjul for examination by a doctor. If the physician needs further evaluation of the images, he/she sends them over the Internet to Global Synergy in the UK where they are forwarded to specialists from around the world for a diagnosis. Compression software today allows shrinking a typical X-ray image by a factor of 30:1 without loss of information. With this level of compression the image can be sent without any difficulty through any existing telecommunication network.

Information poverty is one of the most serious obstacles facing health professionals in the developing world. A typical medical school in the United States subscribes to more than 11'000 periodicals, while similar institutions in developing nations may have access to less than five percent of that figure. Furthermore, medical knowledge is evolving rapidly. Historically it has taken up to five years for new knowledge to trickle down, even to those in the general profession who are reasonably well connected to international flow of information. Beyond the capital city and large urban centres of developing nations the time lag can, of course, be substantially longer. The Internet cannot only significantly shorten this time-lag, but it can also open up a whole new range of information resources to health professionals in developing nations.

Poor sanitary conditions in many developing countries contribute to the emergence and spread of infectious diseases. WHO's information system on disease events occurring worldwide links all major partners in international response for epidemic control. The use of the Internet for the exchange of outbreak information ensures that crucial information can be rapidly and widely disseminated to public health officers, ministries of health and health professionals in the field. Meningococcal meningitis, for example, occurs in seasonal epidemics in a group of 17 sub-Saharan countries known as the ‘meningitis belt'. During the dry meningitis season, daily reporting of cases is required to monitor an emerging epidemic. When a certain threshold is reached, mass vaccination is required. The information exchange via the Internet not only allows monitoring of the disease evolution, it also provides essential communication support for planning and mobilisation of vaccination teams to be deployed in affected areas.

The future of health services over the Internet depends heavily on overcoming a number of infrastructural, regulatory, economic barriers. For developed countries issues such as privacy and confidentiality, licensing, malpractice liability, service payments and reimbursements are of high importance. In developing countries, instead, regulatory matters are still far from being a pressing issue in their health agenda. For many of them, having access to the necessary communication infrastructure at a reasonable cost, and taking the initial steps to set up telemedicine pilot projects are of most importance. The ITU has been active in supporting developing countries achieve both of these goals (see Table 1).

Table 1: Networking health in developing nations

ITU's Telemedicine Pilot Projects

Country Project Implementation date
Ukraine Medical Information System for Ukrainian National Emergency and Trauma Centre in Kiev Oct 97
Mozambique Teleradiology link between hospitals in Maputo (capital) and Beira (second largest city) Jan 98
Malta Telemedicine link between the islands of Malta and Gozo. Mar 98
Ukraine Mobile telemedicine services for victims of the Chernobyl nuclear accident Mar 98
Georgia Telemedicine link through Internet for second opinion between Georgia and Switzerland. Sep 98
Bhutan Telemedicine link between Central Hospital in Thimphu and a small rural hospital Oct 98
Myanmar Teleradiology link between Yangon General Hospital and the hospital in Mandalay Feb 99
Senegal Telemedicine network between several hospitals Mar 99
Russia Telemedicine network between several hospitals Mar 99
Source: ITU.

5. Internet for education

Education and training are primary determinants of a country's prospect for economic and human development and international competitiveness. One of the valuable lessons derived from the Asian economic miracle is that the level of education is one of the single most important factors to explain high economic growth in the past decades. Yet, in 1996, almost 1.5 billion children and adults in the world were illiterate.

Distance education provides learning opportunities to students that, for a number of reasons—geographical distance to centers of education, work schedule, limited financial resources, and the like—would otherwise be excluded from the educational system. From a national perspective the strategy allow for a considerable increase in the number of educated people—with positive effects on the overall national economy. Furthermore, at the University level distance learning raised the hope of diminishing, or halting, the brain drain that most developing countries suffer when their best educated people move abroad for training and some 50 per cent of them never return. For the overall educational system of a nation, distance education promised to increase economies of scale and reduce infrastructure costs.

In recent years the number of distance education programs in developing countries have been growing at a dramatic pace. So much so, that the six largest distance learning universities in the world are located in developing countries (see Table 2).

Table 2: When the Prof. is somewhere else

Largest distance learning universities in the world

Country Institution Established Students Budget (US$ m.) Faculty
Turkey Anadolu University 1982 577'804 [95] 30 1'260
China China TV University System 1979 530'000 [94] 1.2 31'000
Indonesia Universitas Terbuka 1984 353'000 [95] 21 5'791
India Indira Gandhi National Open Univ. 1985 242'000 [95] 10 13'652
Thailand Sukhothai Thammathirat Open Univ. 1978 216'800 [95] 46 3'536
Korea Korea National Open University 1982 210'578 [96] 79 2'840
France Centre Nat. d'Enseignement à Dist. 1939 184'614 [94] 56 4'800
UK The Open University 1969 157'450 [95] 300 8'191
South Africa University of South Africa 1873 130'000 [95] 128 3'311
Iran Payame Noor University 1987 117'000 [95] 13.3 3'665
Spain Univ. Nac. de Educación a Distancia 1972 110'000 [95] 129 4'600
Note: Year between brackets […] refers to the year for which the data is available.
Source: <>

The results of distance education, however, have been mixed. In a significant number of cases outcomes have been rather disappointing largely due to: (a) inadequate learner support; (b) a sense of isolation due to the lack of interaction with other students; (c) a focus on correspondence-type programs; and (d) long delays in feedback to students needs. With the rise of the Internet, the distance learning experience has been completely transformed and many of these barriers overcome. The Internet constitutes a virtual classroom in which intense interactivity and the sharing of resources and information constitutes its essence.

For most developing countries migration to an electronic-based education has come at a difficult time. In most nations the state—that has traditionally been the main financier of education—is facing severe fiscal constraints and retreating from its former direct participation. But, as national states scale back their financing two other types of institutions are increasing their financial participation in the sector: multilateral lending agencies and private sector firms. Some of these private institutions in the developing world have not only the required cash to bring the power of computing and networking to their educational services, but have also been quite successful in raising funds in the stock market, as the example of the Education Investment Corporation (Educor) of South Africa, illustrates. The group—which has investments in education and personnel placement—has been experiencing a booming growth in recent years. The education arm employs more than 4,000 faculty to teach to 300,000 students registered in its 160 branches. In June 1996 company shares were floated on the Johannesburg stock exchange. Educor's turnover more than tripled from December 1996 to the end of 1997, while operating profits rose by 78 percent in the same period. The market capitalisation of Educor already exceeds US$433 million.

The above experiences show that setting up Internet distance education programmes in developing countries is not only conceptually viable, but also practically feasible. Building the required communication infrastructure is generally the easiest and in the long run the cheapest part of the process. What it seems to be much more difficult to achieve—in terms of time and cost—is the sustained production and supply of content. For a number of developing countries the "content challenge" might be even larger due to the fact that: (a) content for distance education programs has characteristics unique to the online nature of the service delivered; and (b) content needs to be suited to local educational needs. In spite of the "content challenge", the Internet seem to be set not only to boost traditional educational services around the world, but also to transform the way in which we understand and experience the learning process.

6. Internet for public telecommunication operators

Few parts of the once near-monopoly telecommunications market are now sheltered from the reach of competition. The twin forces of globalisation and technological change mean that even in those countries which have not yet licensed additional operators to compete, domestically and internationally, against an incumbent PTO, the influence of competitive markets is keenly felt (see Figure 7). But competition to PTOs in developing countries is coming from a surprising source. They won't necessarily have been competition to come in the form of small, local start-up companies, perhaps attached to a university or a non-governmental organisation. And yet this is frequently the nature of ISPs, at least in their early years. One of the distinguishing features of the Internet is that the barriers to market entry are relatively low. This matters to PTOs because it means that it becomes possible for lots of new, small companies, without an established user base to defend and investment schedule to depreciate, to enter the market.

Figure 7: Competitive markets set the rules

Percentage of international traffic open to competition, 1990-2005, and percentage of economies permitting competition, by service, 1999

Notes: In Left Chart, the percentages for 1998 and 2005 are based only on those countries which have made specific commitments under the World Trade Organisation's Basic Telecommunications Agreement. Thus they most likely reflect underestimates of the true market picture.

Source: ITU Direction of Traffic and Regulatory Databases. ITU "Trends in Telecommunication Reform, 1999".

The Internet business also lends itself very easily to being combined, or bundled, with other services. Thus the typical ISP may already be established in a related field, such as software distribution, local cable/satellite TV, video rental. But of the many services offered, the one which presents the biggest dilemma to PTOs is Internet Telephony. On the one hand, it promises to reduce the price of international telephone calls for the citizens of the country. But on the other hand, Internet Telephony could be viewed as a Trojan Horse, which threatens to undermine the pricing structure of the incumbent PTO and undercut its profitable business in originating and terminating international calls. In so doing, Internet Telephony might threaten the ability of the PTO to invest in extending the domestic network and meeting its Universal Service Obligations (USOs).

Internet Telephony does indeed prevent a major challenge to developing country PTOs but one which they would be better advised to embrace rather than to ignore. The fact that Internet Telephony is still in its infancy and occupies only a tiny percentage of total international telecommunications traffic means that developing countries have some time to prepare a strategy to deal with it when it becomes a real threat, as it surely will. Some elements of the strategy might include the following:

  • Ensuring that settlement rates are, to the extent possible, aligned with cost trends so that the margin which Internet Telephony traffic enjoys over incoming PSTN traffic is minimised;
  • Minimising the gap between settlement rates with different correspondents and renegotiating any remaining sender-keeps-all arrangements to remove any possible ‘backdoor' for Internet Telephony traffic;
  • Negotiating with foreign PTOs to share the cost of international leased lines used for Internet traffic;
  • Developing regulations and policy documents explaining clearly the status of Internet Telephony and, as appropriate, establishing a timetable for full liberalisation of the market;

7. To regulate or not to regulate?

Perhaps no issue divides the Internet community as much as that of Internet regulation. To some, the Internet is simply a new method of communicating and doing business and, as with all such advances, the regulatory framework will need to be adapted and altered. To others, the Internet is a new frontier that was expressly created to operate and function without government interference.

Regulation of Internet content is one of those areas in which the public in some countries have been strongly against. On the other hand, there appears in some cases a legitimate concern as to, at a minimum, the appropriateness of certain content which is transmitted over the globally-accessible, and thus influential, Internet. In dealing with this matter, some national administrations are developing policies which mix restrictive legislation with the promotion of industry self-regulation. In Malaysia, for instance, new legislation been debated in Parliament prohibits ISPs from distributing "content which is indecent, obscene, false, menacing, or offensive in character with intent to annoy, abuse, threaten or harass any person". Nevertheless, a "content forum" (which may be an industry body) will be established to prepare a "content code", including "model procedures for dealing with offensive or indecent content", "restrictions on the provision of unsuitable content" and "methods of classifying content."

Copyright law and policy is an important component of the debate over content. Copyright laws attempt to balance a number of interests. On the one hand, the creators of works and the holders of rights to intellectual property are entitled to incentives and compensation for use of their works, and for protection against unauthorised uses. On the other hand, the distributors and users of created works seek affordable and easy access to copyrighted material. Historically, it has been the view of some observers in developing countries that the existing copyright regime protects the interests of the developed countries while unfairly restricting the flow of information and works to poorer countries and their citizens.. Proponents of this view have been particularly reluctant to continue and extend the traditional copyright approach to the Internet, since they view the Net as perhaps the last and best opportunity to ensure equitable access to the information needed for social and economic development.

Privacy over the Internet, another issue that usually falls under the surveillance of regulators, seems to be more of a concern to developed countries than to developing ones. Infrastructure deficiencies, poor network performance, and the cost of services seems to override privacy concerns in many developing nations.

A common theme that runs through any discussion of Internet regulation is that of jurisdiction. In the face of a global phenomenon, procedures that avoid disputes concerning the reach of national laws take on a new dimension and also challenge the potential effectiveness of Internet laws. The global nature of the Internet, and the fact that ISPs, content providers, users and servers, often located at different places around the world, are brought together momentarily by an "electronic encounter", renders it problematic for the courts of one country to exercise jurisdiction over an Internet party that is located in another jurisdiction. In spite of this, national courts have shown some willingness to extend their jurisdiction into various aspects of the Internet for sites located in a different jurisdiction.

Finally, while the Internet has often been viewed as the very essence of a free and open market, recent trends towards concentration indicate that maybe competition policy authorities will need to take a closer look. In the backbone market, the top three providers control more than 70 per cent of the market while the market leader in the retail service provision business, AOL, has more members than its top ten competitors worldwide added together. While the Internet may indeed be "special", it is not immune from the tendencies towards oligopoly that exist in all industries.

8. A policy toolkit for Internet development

What comes next? While predicting new trends on the Internet is always a hazardous business, the next logical step in the evolution of the Internet is almost certainly towards true multimedia, including real-time video, audio, animation effects and interactive applications such as telephony or video-telephony. The bandwidth requirements to support multimedia applications are an order of magnitude greater than even those necessary to support web-browsing. But nevertheless, one can already see the potential demand for this new type of service.

But this stage in the evolution of the Internet, if indeed it does come to pass, potentially carries the seeds of destruction of the usefulness of the Internet for other purposes. In terms of bandwidth requirements, the impact of multimedia applications will be to web-browsing what web-browsing was to email. In other words, unless there is a radical improvement in the performance of the Internet and the capacity of its backbone networks, then multimedia traffic could bring other applications to a grinding halt. The ‘tragedy of the Internet Commons' is that one person's rotating .GIF file, is another person's ‘world wide wait'. If bandwidth were universally available, sensibly priced, and in abundant supply, then this would not be a problem. But bandwidth continues to be a scarce and expensive commodity, particularly in the developing world. Unless sensible policies are developed to price bandwidth and Internet access appropriately, then a multimedia Internet will remain an inaccessible dream.

What steps should policy-makers in developing countries take to ensure that the benefits of the Internet are as widely distributed as possible?

To promote the industry

  • Demonstrate support for Internet applications at the highest levels of government;
  • Promote an active public awareness campaign;

To build infrastructure

  • Increase private sector participation;
  • Open up the basic telecommunications market to a wider range of players and investors;

To expand access to infrastructure and services

  • Permit special tariffs designed to promote Internet services, such as lower prices for a second line, or unmetered local calls for a fixed rate;
  • Promote the use of Telecentres and other means to extend access to under-served communities;

To promote growth of Internet access market

  • Promote competition in the Internet service provision market;
  • Monitor, and if necessary intervene, to ensure that leased line prices, especially for international service, are cost-oriented;

To promote production of local content

  • Create and enforce a legal framework to protect intellectual property and copyright;
  • Consider providing grants and demonstration projects to aid local content production at initial stages;

To stimulate usage

  • Ensure reasonably priced access for schools, universities, libraries and other public service institutions;
  • Provide all citizens with a virtual e-mail address.

Challenges to the Network: Internet for Development was published in February 1999. In addition to the analysis of the role of the Internet in economic and social development, with a focus on developing nations, the report features statistical tables showing time-series data on Internet and telecommunication development.

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