Panic over, then? Not quite. Perversely, the real threat may come from a reduction in internet-traffic growth, says Dr Odlyzko. Too little internet traffic, he contends, could prove to be more dangerous to the industry than too much. A traffic-growth rate of 50%, combined with steady declines in equipment costs, means revenues are stagnant, “which is hardly a cheering prospect for the industry”. If traffic growth continues to fall—it is already below 10% in Hong Kong, where high-speed access is abundant—there will be slowing demand for faster connections from operators and new equipment from vendors. But if compelling new applications drive the growth rate back up to 100%, its level for many years, there will be more demand from customers for new services and equipment. Accordingly, says Dr Odlyzko, the industry should be looking for ways to stimulate traffic growth, rather than limit it.

The survey, conducted by the Oxford Said Business School in London and the Universidad de Oviedo in Spain and released Friday, found that Canada is below the global broadband quality threshold, which measures the proliferation of high-speed internet in a country, as well as the speeds available and the reliability of connections.

While Japan was the only country to meet the study’s standards for future readiness, broadband networks in countries such as Latvia, Romania and Bulgaria scored better than Canada, which ranked 27th out of the 42 nations covered. The United States ranked 16th.

Researchers calculated a broadband quality score, or BQS, by testing download and upload speeds in each country, as well as latency, a factor that measures how instantaneously information travels over a broadband network. They found that in order to meet the demands of today’s internet traffic, broadband networks need to be able to deliver steady download speeds of 3.75 megabits per second and uploads of one mbps with a latency no greater than 95 milliseconds.

Read the full report in CBCNews here.

Engineers who help run the Internet said that it would have been impossible for the United States to maintain its hegemony over the long run because of the very nature of the Internet; it has no central point of control. And now, the balance of power is shifting. Data is increasingly flowing around the United States, which may have intelligence — and conceivably military — consequences. Read more.

The lawsuit involves a 3-2 decision the FCC handed down in early August that found Comcast’s practices violated so-called net-neutrality principles, and ordered the company to provide more details of its network-management policies within 30 days. The FCC also ordered Comcast to stop by the end of the year blocking traffic related to specific applications, such as file-sharing software that allows users to swap videos.

It was the first time the FCC had found a company in violation of the commission’s net-neutrality principles, which lay out consumers’ Internet rights.

Comcast was widely expected to appeal the FCC’s decision, even though the company wasn’t fined. Comcast says its practice of sometimes slowing Internet traffic on file-sharing networks like BitTorrent is reasonable and necessary to prevent a few heavy bandwidth users from slowing other customers’ service. The lawsuit, filed in the U.S. Court of Appeals here, doesn’t go into details about the complaint, but company officials have argued that the FCC has authority to bring enforcement actions under formal rules, not principles. While the FCC has stated a position on net neutrality, it hasn’t established formal rules.

Read the full story in ‘The Wall Street Journal’ here.

Extracts:

Sri Lanka’s internet access quality through broadband within the local boundary is above regional thresholds but sparse local content drives users to access overseas sites at slower speeds, researchers said. The local speeds within Sri Lanka is comparatively higher to what users experience when accessing international web sites, web pages or servers that are located overseas.

“We (Sri Lanka) have very poor local content, we always go international and majority of users access international content and [we have] less mirror sites,” Nimal Maddumage from Sri Lanka Telecom Broadband said.

The lesser local content and mirror sites drive users overseas and the quality of service drops when traffic is increased creating a bottleneck scenario at points where the local path connects to the World Wide Web. Mirror sites are internet copies of the same site located in different geographic areas allowing users to choose the site closest to them to lessen internet traffic and access time.

Presentation slides – Nimal Maddumage, Deputy General Manager (Broadband Networks) Sri Lanka Telecom

Presentation slides – Dinesh Arunatileka, General Manger Marketing, Dialog Broadband Services

Dramatic drops in the price of international capacity as a result of market deregulation in the Asia Pacific is resulting in a shift in the dynamics of Internet traffic, according to a presentation at the APRICOT conference in Taipei this week. Read more.

The problem with this view is that Google has, apparently, already tried and failed several times to get a satisfactory price on capacity from existing trans-Pacific cable providers. The company certainly understands the unit costs of fibre networks as it already owns such infrastructure in the continental United States and, as the world’s Internet leviathan, is reportedly frustrated that it can’t get a decent price on the trans-Pacific route – although that is hardly surprising given that most of the capacity on such pathways is controlled by the very Tier 1 telcos that regard Google as a freeloader and undeserving beneficiary of much of the value of the Internet economy.

Google doesn’t want to build a cable to sell bandwidth to third parties (although that could be a natural consequence and corollary of its plans), but because, as a voracious generator and recipient of Internet traffic, it wants to control its own destiny .

And as our Friday report indicates, Google doesn’t want to build the cable unilaterally. Rather it would much prefer to share the price of construction and deployment with consortium partners so it can gain access to a fibre pair on a true cost basis, rather than paying marked-up retail rates.

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Africa, Offline: Waiting for the Web

Attempts to bring affordable high-speed Internet service to the masses have made little headway on the continent. Less than 4 percent of Africa’s population is connected to the Web; most subscribers are in North African countries and the republic of South Africa.

A lack of infrastructure is the biggest problem. In many countries, communications networks were destroyed during years of civil conflict, and continuing political instability deters governments or companies from investing in new systems. E-mail messages and phone calls sent from some African countries have to be routed through Britain, or even the United States, increasing expenses and delivery times. About 75 percent of African Internet traffic is routed this way and costs African countries billions of extra dollars each year that they would not incur if their infrastructure was up to speed.

…

Prices remain high because the national telecommunications linked to the cable maintain a monopoly over access, squeezing out potential competitors. And plans for a fiber optic cable along the East African coast have stalled over similar access issues. Most countries in Eastern Africa, like Rwanda, depend on slower satellite technology for Internet service.

The result is that Africa remains the least connected region in the world, and the digital gap between it and the developed world is widening rapidly. “Unless you can offer Internet access that is the same as the rest of the world, Africa can’t be part of the global economy or academic environment,” said Lawrence H. Landweber, professor emeritus of computer science at the University of Wisconsin in Madison, who was also part of an early effort to bring the Web to Africa in the mid-1990s. “The benefits of the Internet age will bypass the continent.”

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By Divakar Goswami & Onno Purbo, March 2006
LIRNEasia’s latest research paper is available for comment. The paper looks at the deployment of Wi-Fi in Indonesia, under the 2005 WDR theme, ‘Diversifying Participation in Network Development.’

Download paper: indonesia wi-fi study 2.0 [PDF]

Please post your comments below.

Executive Summary
With their low-cost and quick deployment time, wireless Internet technologies like Wi-Fi offer last-mile access network solutions to developing countries with limited network infrastructure. Among developing countries, Indonesia is unique for the extent of Wi-Fi that has been deployed by Internet Service Providers (ISPs) and private entrepreneurs in more than 40 towns and cities across the archipelagic nation. However, the findings from the current study finds that Wi-Fi “innovations” in Indonesia are not a result of enlightened policy designed to extend communication infrastructure to unserved areas but rather a workaround solution to hostile market and regulatory conditions.

The research objectives were to determine the conditions that gave rise to Wi-Fi becoming an access technology of choice for Indonesian ISPs; the lessons that can be abstracted from Indonesian Wi-Fi innovations; and the steps that must be taken for the next stage of Internet growth in Indonesia. Despite having two regulatory bodies, DG Postel and BRTI, the Indonesian telecommunication sector lacks credible, independent regulation. DG Postel is embedded within the Ministry of Communication & IT and BRTI is nominally independent being understaffed, lacking teeth and being chaired by a DG POSTEL representative. A poor regulatory environment is compounded by a non-competitive telecommunication sector dominated by PT Telkom and Indosat who were given exclusive licenses by the Indonesian government for fixed telephony and international gateways, respectively. In the absence of regulatory requirement to unbundle the local loop, PT Telkom’s monopoly over the last mile facilities that are critical to all local telecommunications services especially Internet service means that Internet Service Providers (ISPs) needed to build their own last mile infrastructure to reach customers. However, license conditions for Network Service Providers, the category that ISPs fall into, forbid them from building their own infrastructure—last mile or backbone. The ISPs used Wi-Fi in the access network as a workaround solution for their inability to build or buy last-mile infrastructure. Until recently (January 2005), the unlicensed use of 2.4 Ghz for Wi-Fi was illegal and the use of 5.8 Ghz continues to be. However, that has not prevented ISPs from using those parts of the frequency because Wi-Fi is cheaper and easier to deploy compared to wired infrastructure and has lower sunk costs at risk if caught by the authorities.

As is well documented in the literature of economics, monopolists do not invest the full amounts required for economic efficiency when they are provided with monopoly returns on their investments. This is the case in Indonesia with backbone infrastructure that is scarce outside the islands of Java and Sumatra and unevenly deployed even in those two islands. The inadequate supply of backbone and lease line infrastructure and the high monopoly prices for leased lines that exceed benchmark prices in other countries by as much as 48 times, has forced ISPs to use Wi-Fi as low-capacity backhaul networks to carry Internet traffic. These cost saving strategies by ISPs have not been able to keep retail Internet prices from being three or four times the price in benchmarked countries. This has resulted in a multi-tiered retailing of Internet service, where large customers like schools act like ISPs using Wi-Fi to connect to neighbourhood networks, other schools and businesses to recover high Internet costs that can be as much as US$4000 per month for a 2Mb link. It is evident from the research findings that ISPs in Indonesia have used Wi-Fi “innovations” to circumvent market & regulatory barriers. Until credible regulatory reform is carried and the telecom market is liberalized, the gains in the telecom sector generally and Internet specifically will be limited and unsustainable. For quickest results for high Internet growth in Indonesia, the regulator must reduce leased line prices as a number of studies in different countries have shown.

The silver lining for Indonesia is the inherently lower costs of Wi-Fi compared to wired last-mile access technologies, providing the country with potentially explosive Internet growth if conducive regulatory and market conditions are created.

Wi-Fi “Innovation” in Indonesia – Final Report Version 2.0

Wi-Fi “Innovation” in Indonesia – Draft Report Version 1.2