View Thread > Development and the Internet > Architecture, Question 2 > Interconnection-competition = chicken-egg
Are you persuaded that interconnection is a serious problem in developing countries? Where would you place the development/establishment of IXPs in the context of other measures that are capable of bridging the access divide? Given what you know about how the Internet works, and the players involved, what do you think should be done to improve Internet connectivity in developing countries? What sort of initiatives would you support and who would you expect to undertake them? Why? Do you think your answers are tied to your responses to the difficult queries posed in Discussion Question 1?
Lack of information infrastructure and inefficient interconnections are serious problems in developing countries due to key impacts on end-users, as well as service providers.
Slow connections caused by inefficient interconnections result in increased costs to end users, especially in countries where dial-up is the only viable way to access the internet for many citizens, and where telephone calls are charged per minute or per impulse.
Users are discouraged when the ability to connect 7 out of 10 times is considered a good benchmark. Individual and business end-users who deal with this problem on a regular basis may fail to see Internet as a useful tool. Instead, to them, the internet becomes a good concept with bad implementation and they turn to more traditional ICT solutions.
Lack of IXPs causes enormous, disproportionate costs to local ISPs, which translates into increased costs to end users and adds uncertainty to the financial positions of ISPs.
Architecture initiatives needed to accommodate bridging the digital divide need to be a joint effort, undertaken by government, NGOs, and international agencies in partnership with local businesses and international corporations. Deregulating telecommunications sectors, privatization programs with no strings attached and free markets would allow for various tools to be used in building the information architecture. Infrastructure in schools, universities and a sufficient number of cheap or affordable access points must be available to the general public in order to bridge the access divide. Wireless fidelity should be explored as perhaps the most appropriate technology for connecting remote communities while bypassing costlier infrastructure solutions in regions where no cable or telephone lines exist.
Very good points in this post.
The fact is that both the quantity of access (e.g. number of minutes per day) AND the quality of service matter. Dropped connections, slow downloads, etc, will mean frustrating online experiences - the true potential of ICTs is not revealed as a result to these people and their incentive to overcome the access barriers is reduced.
Also, limited time online with poor quality connectiosn means that people will use the Net only for their first priority needs (e.g. email), it is certainly not a luxury. Many people in better connected places are able to use many more of the Net's applications (e.g. if you ever want to know any information about anything you just type it into google). Its not just a matter of connecting people, it also matters what happens once they are connected.
Lack of local IP (layer-3) interconnection, and of IXPs more specifically, is a serious problem in developing countries. However, the very possibility of interconnection assumes that there are multiple local networks that need to be interconnected. Many developing countries are characterized by monopoly control of telecommunications (layer-2) infrastructure, with the monopoly telco also operating the dominant layer-3 service. In these cases IXPs can help at the margin, but interconnection has a cost -– and that cost is largely determined by the underlying layer-2 infrastructure, which is set by the monopoly. IXPs allow competing ISPs to enjoy economies of scale in interconnection with each other, but in a large class of cases (i.e., when the competing ISPs are small, when the dominant telco/ISP is predatory) the cost of reaching an IXP itself will exceed the savings that might achieved through free peering with other competing local ISPs. Thus, I’d say that a focus on the creation of IXPs should at the very least be accompanied by an equal emphasis on to goal of fostering the demand for IXPs – i.e., fostering meaningful choice/competition between service providers at both layer-2 and layer-3.
The really egregious cases where IXPs can make an immediate difference are those countries where several medium-sized ISPs have emerged (say, large enough so each participant could expect to exchange a minimum 20Mbps* of traffic with the other participants), but have yet to interconnect locally. In such cases, however, you have to ask yourself: why haven’t they interconnected yet? Why hasn’t an IXP evolved organically? Usually there is a reason, and the reason has to do with commercial or regulatory factors that fall under the rubric of “competitive environment.”
Improving Internet connectivity in developing countries is different from improving Internet connectivity to/from developing countries. Happily they both can be achieved through the same method: getting more people online for more time. Countries do this by reducing the costs, and increasing/extending the means of access. Improving the quality of access is important later, after a critical mass of people enjoy basic connectivity. Appropriate initiatives to achieve this vary dramatically depending on the pre-existing telecommunications environment. In monopoly telco environments, by definition, only the dominant player has the power to change these basic dynamics. Granted, international connectivity adds to overall costs, but the weight of this factor may (merely) seem high to monopoly telcos because it’s one of their few external costs. In any case, international costs go down as local traffic and local content grows. Or rather, it goes down everywhere because technological advances, but it goes down even faster where the benefits of these technological changes are passed down closer to the consumer level.
I’d be grateful if other participants would help be check my assumptions on this question…Does anyone know of a pro-competitive developing country where ISPs have failed to interconnect locally? Does anyone know of a pro-competitive developing country where international transit/interconnection costs are higher than in a monopoly environment (e.g., on a PPP basis)? Does anyone know of a (non-English speaking) monopoly environment with a larger/more developed online content base than a comparable pro-competitive environment?
*actual value depends on the ratio of local layer-2 and layer-3 costs, and thus varies considerably across and within countries.