[kictanet] Bringing down the cost of Internet

Thu Oct 10 09:19:33 EAT 2013

@Ndemo,

Am glad that  you now agree with me that the cost of internet particularly in developing countries -including Kenya - is exorbitant.  I recall that previously sitting  as the policy guy you were quite uncomfortable seeing it this way :-)

anyway, I have been trying to study this internet price phenomena over the last 3yrs and perhaps we could meet for coffee and re-compare notes soon.

regards.

walu.
--------------------------------------------
On Wed, 10/9/13, Bitange Ndemo <bitange at jambo.co.ke> wrote:

 Subject: Re: [kictanet] Bringing down the cost of Internet
 To: jwalu at yahoo.com
 Cc: "KICTAnet ICT Policy Discussions" <kictanet at lists.kictanet.or.ke>
 Date: Wednesday, October 9, 2013, 8:21 PM

 Listers,

 I am in Nigeria for the launch of the Global Alliance for
 Affordable
 Internet (A4AI) which I was appointed the Honorary
 Chair.  This is a
 diverse and truly global coalition committed to driving down
 the cost of
 internet access in less developed countries. We believe
 that, while
 technological solutions are advancing rapidly, policy and
 regulations
 remain a significant barrier to affordable internet. A4AI
 seeks to create
 the conditions for open, competitive and innovative
 broadband markets
 through a combination of advocacy, research and
 knowledge-sharing. When we
 succeed, we will help to lower access costs to meet the UN
 Broadband
 Commission target of broadband access priced at less than 5%
 of monthly
 income, thereby helping billions more to come online and
 unlocking
 significant socio-economic benefits.

 Why is A4AI needed?
 “Estimates suggest that as much as two-thirds of the
 world’s population is
 not connected to the internet, with penetration rates in
 less developed
 countries averaging around 31%. In Africa, this figure drops
 to 16% (while
 in in Kenya we are approaching 40% Liberia is at .5%) and in
 the world’s
 49 least developed countries, over 90% of people are not
 online. (Source:
 ITU 2013) and (Broadband Commission 2013)

  “Most often, this is for affordability reasons. In
 developed nations, the
 average cost of broadband internet access is around 1-2% of
 monthly
 household income - less than a daily coffee. In less
 developed countries,
 this figure skyrockets to over 30%, and in 17 countries a
 basic internet
 connection can cost well over 100% of average monthly
 income. Overcoming
 this digital divide is critical so that technology and
 innovation can be
 harnessed to accelerate progress in areas such as education,
 food
 security, job creation, public health, and gender
 equity.”

 On A4AI’s goals:

 “Our primary focus is to reach the UN Broadband Commission
 Broadband
 Target of entry-level broadband services priced at less than
 5% of average
 monthly income. In doing so, we hope to enable billions of
 people to come
 online (with a particular focus on low-income countries) and
 make
 universal access a reality.
 On Strategy:

 “Innovative technological solutions to affordability
 challenges are
 progressing apace. However, the best technologies in the
 world can’t drive
 change if quasi-monopolies or regressive policies prevent
 them from being
 implemented. Changes to policy can deliver impressive
 results, fast. So,
 through a combination of advocacy, research and
 knowledge-sharing, A4AI
 will drive policy change by seeking to create the conditions
 for open,
 competitive and innovative broadband markets. We are unique
 in pursuing
 this approach.”

 On Specific Activities:

 “A4AI is focused on creating conditions for open,
 competitive and
 innovative broadband markets via regulatory and policy
 change. Activities
 include: original research (including the publication of an
 annual
 Affordability Report); publication of regulation and policy
 best
 practices, and illustrating these via case studies; and
 in-country
 engagements including networking and knowledge-sharing. We
 will work
 closely with national governments – three to four
 countries in year one,
 expanding to 10 - 12 in years two and three.”

 How are policies keeping prices high?

 There are numerous examples of how policies keep prices
 high. Here are
 just a handful:
 • Luxury taxes: Tax accounts for more than 20% of the
 total cost of mobile
 ownership in at least 13 African countries. (Source: GSMA
 2011)  Tax
 reductions on PCs in Colombia have increased PC penetration
 by 100% in 2
 years, and Internet penetration increased 466% from
 2005-2008, versus 161%
 across the region (source: IDC Colombia 2009).
 • Access to international gateway: In 8 of 20 African
 countries surveyed
 by ISOC there is little or no competition on the
 international gateway. In
 the same survey, only one of the 20 countries has fully
 privatized their
 incumbent telecoms company. In South Africa firms began
 deploying
 open-access metro fibre in 2009, and also furnished a link
 from
 Johannesburg to the SEACOM (undersea cable) landing station
 in order to
 avoid very high charges proposed by Telkom (the state-owned
 operator).
 This helped to slash international capacity prices by over
 60%.
 • Universal Service Funds (USF) for Broadband (example of
 how policy can
 lower prices): USFs and similar subsidies improve the
 availability and
 affordability of broadband for unserved or underserved
 citizens.
 Historically focused on basic telephony services in remote
 areas, USFs are
 now being adapted to promote the adoption of broadband by
 subsidizing
 content, devices, services, and digital training, as well
 as
 infrastructure. USFs can serve as a tool to stimulate demand
 and increase
 adoption and use.

 About A4AI’s membership base:

 “A4AI is a diverse coalition of over 30 private sector,
 public sector, and
 not-for-profit organizations who have come together to
 advance the shared
 aim of affordable access to both mobile and fixed-line
 Internet in
 developing countries. We are the first truly global
 coalition to tackle
 this issue and our members are from both developed and less
 developed
 nations. The World Wide Web Foundation, established by web
 inventor Sir
 Tim Berners-Lee, initiated the Alliance.”

 1. What, exactly, will A4AI do?

 A4AI will undertake a blend of international advocacy and
 research,
 coupled with on-the-ground work. We’ll be working in three
 pioneer
 countries by the end of 2013, and will bring together
 in-country
 stakeholders to identify obstacles, how to tackle them and
 we’ll then help
 to drive implementation. We will be developing advocacy and
 policy
 proposals in conjunction with these stakeholders in each
 country. We will
 also continue to press at international level on these
 issues and our work
 will be informed by original research – with the first
 edition of our
 Annual Affordability report being released in December
 2013.  We’ll also
 publish case studies, position papers and briefings on
 lessons learned
 throughout the year to share knowledge.

 2. What is the relationship between Internet.org and A4AI?

 While A4AI and Internet.org are two separate organisations,
 there is a
 common goal (in addition to common partners in Facebook and
 Ericsson) of
 making internet access available to more people around the
 world.  A4AI
 has a clear focus on policy and regulatory issues
 surrounding access while
 Internet.org is focused on identifying technical innovations
 and new
 business models that can help drive down the cost of
 data.  Wherever
 possible, we will we collaborate to maximise impact.

 Regards.

 Ndemo.

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