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Connecting ICTs to Development
The IDRC Experience
By Laurent Elder, Heloise Emdon Wimbledon Publishing Company
Copyright © 2013 International Development Research Centre
All rights reserved.
ISBN: 978-0-85728-136-4
CHAPTER 1
CATALYZING ACCESS THROUGH SOCIAL AND TECHNICAL INNOVATION
John-Harmen Valk, Frank Tulus, Raymond Hyma and Florencio Ceballos
The main goal of the International Development Research Centre's (IDRC's) "Information and Communications Technologies for Development" (ICT4D) program was to harness information and communications technologies (ICTs) for the benefit of all citizens of developing countries. Increased access to ICTs was recognized as a means to a greater end – building an inclusive knowledge society and economy in the developing world. Yet it was also recognized that a non-uniform spread of ICTs was contributing to a persisting and, in some cases, widening gap between the information "haves" in more developed countries and the information "have nots" in less developed regions of the world (Sciadas 2005).
IDRC's ICT4D program aimed to mitigate the persisting inequality in access to ICTs. It first addressed connectivity to ICTs, or the so-called "first order digital divide" (Riggins and Dewan 2005). Second, it tackled access from the standpoint of the ability to use ICTs and to contribute content, the so-called "second order digital divide" (Brotcorne et al. 2010; Hargittai 2002). (See Box 1.1.) This chapter describes the work of IDRC and its partners in overcoming the first order digital divide by way of social and technical innovation.
For the first order digital divide, the driving idea behind the program was to demonstrate how social and technical innovations could be adopted and adapted in the developing world so as to catalyze access and therefore bring about socioeconomic dividends for disadvantaged populations. Throughout its history, IDRC's ICT4D program sponsored an extensive range of research on numerous ways to increase access to ICTs in the less developed regions of the world. Action research projects focused on Internet service providers (ISPs), Internet exchange points (IXPs), very small aperture terminal (VSAT) satellite connectivity, bandwidth consortiums, as well as telecenters and community wireless networks.
IDRC's funding related to overcoming first order digital divide issues generally evolved from a main focus on social and technical innovation to a focus on policy and egulatory environments. However, this shift in thinking does not mean that it eventually ignored the former focus in favor of the latter in working toward increased access. The research findings and lessons learned through partners funded by IDRC reveal that concurrent attention to social and technical innovation and to policy and regulatory environments is needed to increase access to ICTs. This chapter and the following provide a two-part story about how IDRC sought to catalyze access to overcome the first order digital divide in two distinct, but interrelated ways.
Part I: Demonstrating the Feasibility of and Demandfor ICTs (ISPs, IXPs, VSATs and Bandwidth Consortiums)
IDRC recognized that it had to direct its programming toward implementing basic Internet backbone connectivity infrastructure before the benefits of ICTs as a driver of socioeconomic development could be realized. In certain regions, this meant showing that establishing national-evel connectivity infrastructure was feasible. In other regions, it meant extending connectivity infrastructure to rural or underserved areas. These latter areas are often referred to as the "last mile" because governments and telecommunication companies often delay or avoid rollout in these areas due to the high cost and challenge of managing those parts of a network.
IDRC's early programming focused on supporting partners in a limited number of countries that were chosen because they had little or no connectivity infrastructure. Later programming expanded beyond these target countries to focus on underserved populations in the developing world generally. IDRC funded research on the creation of ISPs, on the effectiveness of local peering points such as IXPs and on the possibilities for overcoming the high cost of international satellite services by using VSATs. It also supported bandwidth consortiums to reduce connectivity costs. Most notable was the interaction with African universities – key research recipients of IDRC grants – to initiate discussions about more effective and efficient access to Internet connectivity.
Internet service providers (ISPs)
Early ICT4D programming at IDRC, begun in the late 1990s, funded a series of partners in Asia that sought to establish national Internet connectivity via the creation of ISPs to try to determine how developing countries in Asia could best achieve national and local connectivity. IDRC took on the high-risk role of investor for the establishment of ISPs when no other investors existed in order to demonstrate the utility of Internet connectivity and to stimulate demand. In four of the countries targeted, IDRC-funded ISPs were the first to provide stable Internet connectivity. In those countries that already enjoyed stable, albeit limited connectivity, IDRC-funded ISPs expanded networks and initiated significant reductions in connectivity prices (Graham and Harfoush 1999, 9). This funding of ISPs in Asia was highly significant, as it showed that creating national Internet connectivity in countries with poor Internet infrastructure was possible. The "demonstration effect" became apparent as a private ICT sector quickly emerged in those countries where IDRC had helped to establish ISPs – countries that continue to experience sustainable Internet services today.
IDRC pursued ISP implementation in a variety of ways, exploring different technological alternatives and organizational models that would be sustainable and provide reliable performance and services at a reasonable cost. Pan Mongolia, the first IDRC-funded ISP project in Asia, involved Datacom, an already-existing electronic networking company in Mongolia. The project supported Datacom so it could follow through on plans for network expansion that required capital investment on a scale unaffordable at the time. In Laos, IDRC teamed up with the government's Science, Technology and Environment Organization (STENO) to connect the country to the Internet for the first time. Similarly, in Vietnam, IDRC worked in conjunction with a government agency called the Institute of Information Technology (IOIT) to establish a full Internet link and an Internet backbone as well as an ISP. IDRC also initiated ISP projects in several other Asian countries: Bhutan, Bangladesh, Cambodia, the Maldives and Sri Lanka.
For most of its projects, IDRC's ICT4D program provided loans that it would recover several years after the ISPs had been firmly established. IDRC also tried a special approach of acquiring equity in an ISP company, forming public–private partnership models as a way of creating sustainable ISPs. This was the case with its ISP project in Sri Lanka, called Pan Lanka. Here, IDRC teamed up with the Norwegian Agency for Development Cooperation to form a joint venture, for-profit company called Pan Lanka Networking (PLN) (Afonso 1999, 44). The first model (recoverable loans) required much less time and fewer resources than the second model (forming a joint venture company). The second model posed significant challenges with regard to both the time and the skills needed on the part of IDRC to operate such a venture. While this second model should not be excluded outright, its challenges would have to be considered in any future attempt to pursue such an approach. In both models, however, IDRC was able to influence the private sector and to build development objectives into commercially sustainable operations.
The rationale for public–private partnerships in the establishment of ISPs in several Asian countries was based on two assumptions, both of which proved to be well founded. First, IDRC recognized that establishing ISPs is a costly affair in the initial years with recovery of initial investments not seen until a few years into the endeavor. It was for this reason that few private investors at the time were interested in creating and expanding services, particularly to rural regions or to regions where awareness and demand were low. Second, IDRC assumed that, if well marketed and well managed financially, ISPs could potentially operate at a break-even or even a profitable point. In other words, IDRC could create self-sufficient ISPs that would, in turn, contribute to development in their respective countries. Project sustainability was key to IDRC's ICT4D programming and was built into the structure of the ISPs from the outset. By 1999, the various ISP projects funded by IDRC were financially viable. While some ISPs would later become uncompetitive with the emergence of other private ISPs – particularly given the transition in the telecommunications industry worldwide to increased international investment – the rationale for establishing ISPs still held. IDRC achieved its objective: providing quality service at lower cost by creating ISPs in regions where connectivity was lacking (Afonso 1999, 47).
While IDRC hoped to ultimately start extending access to Asian populations broadly through the creation of ISPs, it came to realize that the ISPs it funded would necessarily have to target government, NGOs, private businesses, universities and research institutions as primary clients. It focused on these groups for several reasons. First, as the ISP needed to recover costs and operate at a sustainable level, it had to target groups that were able to pay for the services. Second, IDRC concentrated on these groups because they could create further demand for ICT service provision, resulting in the emergence of and growth in a private ICT sector to cater to that demand. In other words, by initially aiming at these groups, IDRC could realize its objective of establishing national-level Internet connectivity infrastructure. The resulting demand for ICT services would stimulate an ICT market that, as it developed and expanded, would lead to service provision at more affordable prices and greater accessibility to the population at large (Graham and Harfoush 1999, 12).
IDRC operated with the assumption that attention to such groups would lead to expanded service for all. It also recognized that, because the demand for ICT access could grow tremendously, it had to target its interventions in feasible and effective ways. In this regard, IDRC learned that it had to be conscious about focusing its social and technical interventions (in the case of ISP creation, toward limited groups) in order to work toward increased access and broad social and economic development (Afonso 1999, 20).
In short, IDRC's job was to help stimulate demand within its principal client base – universities, public policy research institutes, NGOs and international agencies – and to withdraw once the private sector emerged to provide the services.
Internet exchange points (IXPs)
In the early 2000s, developing countries wanting to access the Internet needed to connect with hubs in North America and Europe and pay for the associated costs of up and downward linkages to these hubs. More than 90 percent of international Internet traffic at that time passed through the United States. The IDRC-sponsored map "The Internet: Out of Africa" provides a striking picture of this reality with regards to Africa (see Figure 1.1). Intra-African Internet traffic in 2002 was sparse, paling in comparison with the traffic routed via North America, Europe and Asia. The global Internet infrastructure at the time resulted in a net outflow of funds from developing countries to the United States, with the cost of the international links borne by customers in developing countries. The high cost of international bandwidth was the key bottleneck constraining access to the Internet in developing regions.
In an effort to overcome this cost challenge, IDRC's ICT4D program and the ITU commissioned a paper on establishing local and regional IXPs written by the African Regional ISP Association (AfriSPA) for the 2004 Global Symposium for Regulators (IDRC and ITU 2005). The paper showed that the use of international bandwidth for the routing of national or regional African data cost African users an estimated US$400 million per year (IDRC and ITU 2005, 4). AfriSPA, with support from IDRC, developed technical guidelines for establishing IXPs that were applied in six countries – Nigeria, Tanzania, Uganda, Mozambique, Ghana and Kenya. These IXPs made it possible for local Internet traffic between ISPs to be routed within a country, bypassing the need for an upstream service that was likely outside the country or even the continent. The IXPs resulted in routing efficiency by cutting the latency (i.e., the delay in data packets being sent through the Internet) of interconnection between ISPs and by preserving international bandwidth capacity for international Internet traffic. IXPs also reduced the costs of interconnection, thus enabling more affordable access to the Internet.
Data regarding the impact of IXPs on national, regional and continental African Internet flow showed positive developments (UNGANA n.d., 4–5). For example, data on Internet flow in Kenya demonstrated a significant improvement in the performance of local infrastructure. Data from Rwanda revealed a great increase in connectivity speed, making local ICT applications such as e-learning, telemedicine, e-commerce and e-government that had been previously hindered because of the high cost of satellite links possible (Longwe and Rulinda 2005). These projects showed the importance of IXPs to interconnect ISPs within the countries and regions of Africa so Internet users could exchange domestic and regional Internet traffic on the African continent without having to route Internet traffic via Europe or the United States.
With regard to regional IXPs, research funded by IDRC's ICT4D program showed that two factors in particular affect the feasibility of creating a regional IXP. The first is the percentage of Internet traffic directed toward another country; a low percentage makes it less worthwhile. The second is the price of international bandwidth; falling international bandwidth prices erode the economic imperative of establishing a regional IXP. That said, for landlocked countries with no access to submarine Internet cables or for countries further removed from main international Internet hubs in Europe or the United States, the utility of a regional IXP is substantial (IDRC and ITU 2005, 17). To establish a regional IXP, IDRC-supported research also learned that it would be important to open up competition for the operation of the international Internet gateway in those countries where a monopoly existed – or at least to make it a regulatory priority to reduce the costs of purchasing bandwidth through the monopoly operator controlling the international gateway (IDRC and ITU 2005, 19, 23). Without such measures, those holding the monopoly for the international gateway enjoyed a substantially more privileged position because they could control pricing of all Internet traffic routed in and out of the country. IDRC-supported research findings regarding IXPs at both the national and regional levels show that, due to their importance, they should be included as part of national ICT development strategies and regulation (Longwe and Rulinda 2005).
Very small aperture terminals (VSATs)
As mentioned above, the cost of Internet access in Africa remained extremely high at the turn of the millennium. Rates were more expensive than in other regions of the world, ranging from 10 to 100 times those in North America and Europe (GVF 2004, 8); compared with the average African's purchasing power, they were astronomical. In light of this cost, IDRC explored satellite technologies – specifically, VSAT – as a potential mode by which to roll out cheaper, wider-scale Internet access. VSATs were a potential solution for overcoming the nonexistent or inadequate Internet backbone infrastructure, as well as a way of avoiding the high costs of installing fiber connectivity to remote regions. Installation of VSATs was possible because satellite coverage spanned nearly all regions of Africa, as shown in the map "Open and closed skies: Satellite access in Africa" produced in 2005 (see Figure 1.2).
(Continues...)
Excerpted from Connecting ICTs to Development by Laurent Elder, Heloise Emdon. Copyright © 2013 International Development Research Centre. Excerpted by permission of Wimbledon Publishing Company.
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