How much is the Internet worth?

Posted on March 9, 2013  /  0 Comments

The Economist has an interesting discussion of several academic papers addressing aspects of the question. Shane Greenstein of Northwestern University and Ryan McDevitt of the University of Rochester calculated the consumer surplus generated by the spread of broadband access (which ought to include the surplus generated by internet services, since that is why consumers pay for broadband). They did so by constructing a demand curve. Say that in 1999 a person pays $20 a month for internet access. By 2006 the spread of broadband has lowered the real price to $17.
Having just finished teaching a course for regulators from five South Asian nations, this para from Pratap Bhanu Mehta’s column on state capacity in India resonated with me. The second black hole of the state is regulatory certainty. The biggest regression over UPA 2 was that it continued to multiply regulators, while at the same time moving away from principled regulation. It got into trouble in sector after sector because it could not stick to regulatory frameworks with credibility; even in PPPs, it was amenable to arbitrary discretion. This also created openings where other institutions like courts could compound uncertainties.
I have given versions of this lecture in many forms at SAFIR over the years. The difference this time was that it was the foundation for a series of units based on the research on customer-relations management conducted across Bangladesh, India and Sri Lanka by LIRNEasia and presented by Helani Galpaya and Rajkiran Bilolikar. Their slidesets will be put up shortly. Mine are here.
Another big news story from Barcelona was about Mozilla entering the OS wars. Mozilla is not alone in believing that other systems can thrive. In October Microsoft, which has never had more than a minuscule share of the phone business, brought forth Windows Phone 8. Most Windows smartphones are made by Finland’s Nokia, which dropped its own plans for a new system when it threw in its lot with the American software giant. BlackBerry, a Canadian company formerly called Research In Motion, hopes to recover lost glories with BlackBerry 10, which appeared in January after much delay.
From where I stand there is little doubt that the access network will be wireless, except perhaps in high-density housing in cities. But we have so many people going on about the necessity of fiber to the home, even from within government. But I never hear them talk about the need to liberalize the permission process for trenching in city streets. “One of the biggest issues within the market today is the movement of bandwidth – there are no routes available for fibre and companies in the business are really doing their own thing. In Cape Town there is a law now which dictates that trenches can only be opened once, and this is very difficult for a competing business.
I just returned from the Mobile World Congress in Barcelona, a monster event with 70,000 plus attendees that puts the ITU Telecom World events to shame. No wonder ITU’s Hamadoun Toure was introduced at the Ministerial Program as being a good friend from GSMA’s sister organization. We talked policy, but the real game was the exhibition. NYT reports one of the more significant piece of news to emerge: The new handsets, which the company introduced at the Mobile World Congress industry trade show in Barcelona, reinforced Nokia’s strategy of aiming at the lowest-priced but fastest-growing segment of the market. The Nokia 105, the company’s new basic, entry-level phone, will sell for 15 euros, about $20.
Thomas K Thomas has been covering Indian telecom issues for a long time. His reflections on the lessons that need to be learned from Indian spectrum policy since 1994 are worth a read: Back in 1994, when telecom licences were given out for the first time, a flawed auction design allowed non-serious players to bid astronomical sums and then default on payments. In 2002, operators were given additional spectrum on subscriber-linked criteria without any upfront fee. This was the first time anywhere in the world spectrum was given based on number of subscribers. In 2008, the then telecom minister A.
I should not have been surprised, but I was. In the course of the Asia Pacific Summit session that I was moderating the Chief Strategy Officer of Indosat, Prashant Gokarn, said that they are no longer keeping 30% of earnings from apps, but giving pretty much everything to the developers. We can make our money on data, he said. I asked, is this just you? Supun Weerasinghe, Chief Stategy Officer at Axiata, said, no.
The government of Myanmar has received 91 expressions of interest for telecom licenses. We were not surprised when the number hit 18, but 91? Now the question, according to Bloomberg, is how to narrow down the field in the next two stages, down to two: Rules for the second stage, where bidders eligible for the third and final stage will be determined, will be provided “in coming weeks,” according to last week’s statement. “Having prior emerging market experience should be beneficial, along with the ability to deploy capital, relationships with the equipment vendors or handset procurement,” Gupta said. “Reforms in the telephony sector are critical for overall development and progress, so they will need to be mindful of security and social issues too.
Nalaka Gunawardene, a friend and colleague, has provided an overview of the hazards posed by near-earth objects. Thousands of pieces of cosmic debris enter our atmosphere every day — most are burned up before hitting the ground (producing harmless ‘shooting stars’). Larger pieces that crash-land are called meteorites. Even then, average ones are too small to cause much damage. Once in a while, a large enough piece comes along — as did on February 15 – which can be an asteroid or part of a comet.
The country with the worst ICT connectivity happens to be in our region, the Asia Pacific. But Google’s Eric Schmidt, again demonstrating the value of engagement, appears to have opened the door another few milimeters, according to IHT: North Korea will finally allow Internet searches on mobile devices and laptops. But if you’re a North Korean, you’re out of luck — only foreigners will get this privilege. Cracking the door open slightly to wider Internet use, the government will allow a company called Koryolink to give foreigners access to 3G mobile Internet service by March 1, The Associated Press reported. The decision, announced Friday, comes a month after Google’s chairman, Eric E.
Alan Westin’s book “Privacy and Freedom” was published in 1967. He could have rested on his many laurels. But he did not. He engaged with the privacy issues of today: In recent years, Mr. Westin turned his attention to the Niagara of personal data loosed by Google, Facebook and their ilk.
Universal access was discussed in “Networking Revolution: Opportunities and Challenges for Developing Countries” of the World Bank in June 2000 as follows: In low-income countries, however, the focus should be on providing public access to services. The only realistic objective in the short term is therefore to achieve “universal access”, whereby everyone would be able to access a public booth in every town, village or vicinity or within “reasonable” distance. What “reasonable” distance actually means, what services are to be provided at every public booth (telephone, e-mail, real-time Internet), and which of these services are appropriate at what level in the hierarchy of towns and villages, will very much vary from one country to another, depending on potential demand and ability to pay for these services. The scale at present runs from access to 2 Mbps high-speed Internet lines for every home in Korea to a telephone within (distant) walking distance in some African countries. That was 13 years ago.
On 27th of February, I will be moderating a panel discussion following key notes by Chairman BTRC Sunil Kanti Bose and Minister of ICT Indonesia Titaful Sembiring. Should prove intersting. Asia Pacific Regional Summit 2013 Leveraging the New Mobile Horizon – Connecting Asia through Mobile 09:00 – 12:30, Wednesday 27 February 2013, Auditorium 1, Hall 8.0, Fira Gran Via, Barcelona 09:00 – 09:05 WELCOME AND INTRODUCTION Irene Ng, Head of Asia, GSMA SESSION 1: DEVELOPING ASIA PACIFIC 09:05 – 09:45 KEYNOTES Preparing for a new age of connectivity in Bangladesh Sunil Kanti Bose, Chairman, BTRC Driving innovation in ICT throughout Indonesia to support the country’s economic growth H.E.
LTE (aka 4G) is manifolds faster than UMTS (aka 3G). That doesn’t mean the governments can make more money from auctioning LTE spectrum. Her Majesty’s government, which had forked £22.5 billion from UMTS auction 12 years back, knows it. Yet the British Finance Minister, George Osborne, targeted £3.
GSMA Mobile World Congress has become the preeminent international event in telecom. A Government Mobile Forum is held as part of it. I have been asked to moderate two sessions, the first being described below. It will be held on the morning of 26th February in Barcelona. I look forward to it.