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How to Shrink A Wide Digital Divide?

By Scott Bradner

The core problem in the network neutrality debate is an economic one. Once upon a time Internet service providers (ISPs) thought that they could make money by offering connections to the Internet. Most of the larger ISPs also made some money offering extra services including email and web hosting but their basic revenue plan was based on plain Internet connectivity. This turned out to be a hard way to make a living. Over the last few years telephone and cable companies have become the largest ISPs. These companies, in general, feel that being a pure ISP is a good way to lose a lot of money -- particularly if they need to spend a lot to upgrade their infrastructures -- thus they hunger for a way to make extra money from the value of the bits flowing over their networks. The ISP business is one where competition has not yielded the kind of benefits that it has in other areas such as cell phone service, maybe because there little real competition but also maybe because the cost of the new infrastructure is very high.

One approach to reducing the cost of new infrastructure that is being tried in a number of places is to have government pay for the infrastructure and make it available, at low cost, to multiple ISPs. (See for example, "Utopia, except for the phone companies" http://www.networkworld.com/columnists/2003/1201bradner.html) The hope is that multiple ISPs will use this type infrastructure and compete for customers and that ISPs will see that a neutral network is a competitive advantage. This is a different approach than having governments become or bless ISPs. (See "Unwiring cities" - http://www.networkworld.com/columnists/2004/091304bradner.html)

The US is not the only place where competition has not caused the deployment of good, neutral, Internet infrastructures. The United Nations Conference on Trade and Development (UNCTAD) has just issued a report on the digital divide between developing and developed countries. (http://www.unctad.org/Templates/Download.asp?docid=6994&lang=1&intItemID=2068) This report shows just how out of balance the Internet world is. For example the report highlights (http://www.unctad.org/Templates/webflyer.asp?docid=6994&intItemID=2068&lang=1&mode=highlights) notes that "a person living in a high-income country is over 22 times more likely to be an Internet user than one in a low-income country."

The report shows that, even with increasing privatization, competition and independent regulation, three key factors in the development of vibrant telecommunications, in much of the world, Internet deployment in the poorer countries is very limited. The report examines the possibility of government funded neutral Internet backbones to bring connectivity to villages in poor countries. Local ISPs and providers of local services such as schools, small phone companies, health clinics, or Internet cafes could then connect, at their own expense, to these backbones. The report cites the importance of the NSFNet in the creation of the current US widely-deployed Internet. It also points out that the money the US government put into the NSFNet and other research networks is small potatoes when compared to the benefits the Internet has brought.

I continue to have a great worry that total reliance on individual ISPs, in the US or elsewhere, to fund the backbone networks necessary for advanced Internet applications is leading us down a path to an Internet without the freedom to innovate or to select an application service provider of my choice -- all because the cost of the infrastructure is so high and there is so little foreseeable competition. Maybe it is time to take a very serious look at alternate ways to fund the backbones. The UNCTAD report provides one suggestion, another one might be privately funded but regulated common-carrier backbones that multiple ISPs could use. In any case, I find it hard to see today's mostly open Internet in the future if we keep muddling along the path we are currently on.

disclaimer: At its best, Harvard is a muddle reducer but the University has not expressed an opinion on this particular muddle.