**Trends in Telecom Development Globally: A Perspective from
Washington**

**By Diane E. V. Steinour**

**Office of International Affairs**

**National Telecommunications and Information Administration (NTIA)**

**U.S. Department of Commerce**

**Washington, D.C. USA**

**Ph: (1-202) 482-1866**

**Fx: (1-202) 482-1865**

**Email: dsteinour@ntia.doc.gov**

**Abstract**

*Both in the United States and overseas, wireless technologies are
playing a significant role in development, in many cases where wireline
technologies have literally fallen short. At the same time,
decision-makers no longer need to be convinced of the benefits that
access to and use of Information and Communications Technologies (ICTs)
provide. Rather, the shift is to find the best paths to universal access
and developing principles for success to share as best practices. The
U.S. Government is pursuing several paths to promote more universal
access to ICTs, both in the United States and abroad. The outcomes of
the recent World Summit on the Information Society (WSIS) and the launch
of the U.S. Digital Freedom Initiative underscore these efforts.*

In early January 2004, the People's Republic of China announced that
there are now more mobile customers in China than there are people in
the United States of America.(1) In late January 2004, the GSM industry
proudly crowed that it expects the one billionth GSM customer in the
First Quarter of 2004.(2) Up near Nome Alaska, the Bering Straits
natives organized a non-profit tribal consortium called Kawerak, Inc.
Twenty Inuit tribes have pooled their knowledge and resources to develop
the Wireless WALRUS project -- Web Access Links for Remote User
Services. These native peoples have found another way to preserve their
3,000 year old presence in the Bering Strait region by using wireless
connectivity over 26,000 square miles. (3)

In Tajikistan and Armenia, institutions and commercial users are using
an "air bridge," or radio modem for Internet Service Provision
connectivity. (4, 5) Over in Chicago, the Center for Neighborhood
Technology (CNT) is a low-income community-based network. Early on, they
learned the need to develop a scalable, replicable, and self-sustaining
method to deliver high-speed, low cost Internet service that was revenue
generating. The CNT now operates the Wireless Community Networks,
focused on capacity-building using WiFi connections (802.11b) between
four urban, suburban, and rural Illinois communities. (6)

These are key and current examples of recent and varied approaches using
wireless technologies to promote greater Information and Communications
Technologies (ICTs) development. They focus on

partnership, on novel uses of current and new technologies, and in some
cases, on mammoth commitment of national resources as in China.

There is no doubt the world is growing fonder of innovative wireless
applications. But each country has to foster an economic and social
environment that will allow technological innovation to flourish. Human
capacity-building is just as important as siting new cellular towers or
matching venture capital to new entrepreneurial efforts.

By exploring some of the current trends in wireless telecommunications
development, we can establish the context for current USG development
policy goals and initiatives in this area.

**I. The Case for Development of the ICT Sector**

A question often heard in development circles is why should a poor or
developing country focus limited resources on development of the ICT
sector? Why should developing economies pursue this path?

In the new global economies, ICT capabilities and skills -- or their
lack \-\-- help to determine a nation's ability to compete, its economic
growth, and most important, its standard of living. Exhibit number one
and two: the two largest world economies, the United States and China.
As of December 2003, according to Dr. John Marburger, the Director of
the United States Office and Science and Technology Policy in the White
House, the U.S. ICT industry represents only 8 percent of all American
enterprises. However, this 8 percent produces 29 percent of U.S.
exports, generates high-quality jobs, and contributes strongly to
productivity growth across all economic sectors. It is estimated that 40
percent of U.S. productivity growth between 1995-2002 can be attributed
to ICT. (7) As of January 2004, China's Ministry of Information
Industries (MII) Vice Minister Lou Qinjian notes that ICT growth in
China has generated 6 percent of China's Gross Domestic Product (GDP)
growth. (8)

A growing recognition of the importance of ICT for economic and social
growth led to the United Nations' (UN) call for two World Summits on the
Information Society (WSIS). The "First Phase" of the WSIS took place
December 10-12 in Geneva, Switzerland. There, participants from over 175
nations agreed on "the pressing need for universal ICT access and the
widespread infrastructure on which it is founded. It \[the need for
universal access\] also points to enabling environments as essential for
wider technology access and use and underscores that strong capacity
building efforts are needed to achieve universal access. The widespread
availability of low-cost applications plus respect for multilingual,
diverse and culturally appropriate content are endorsed as well." Such
issues as intellectual property rights, the control and management of
Internet infrastructure, ICT development financing, human rights and
freedom of expression were also addressed. (9)

The Summit agreed on specific goals, such as "connecting all villages,
schools, hospitals and governments with ICT by 2015 and ensuring that
half of the world's people are within reach of ICT." The goals are
linked to pursuit of the UN's Millenium goals, an effort to combat
"poverty, disease, homelessness, environmental degradation and gender
inequality." Summit participants recognized a "pressing need" for
universal access to ICT and related infrastructure, while noting that
"strong capacity building efforts are needed to achieve universal
access." (10) Participants will meet again in 2005 to measure progress.

At the WSIS, the U.S. head of delegation, Dr. John Marburger noted three
key principles that reflect the U.S. Government's broad ICT
developmental goals. These goals are aimed at stimulating and
cultivating science, skills, and business infrastructure. The first is
that domestic policies must encourage investment in research and
innovation. Supporting goals emphasize movement toward privatization of
ICT services supply, that is elimination or reduction of government
ownership, and introduction of competitive supply models. To stimulate
greater investment in infrastructure, governments must strive to create
a stable and positive business and social environment.

Second, governments and the private sector must strive to invest in
human capacity-building efforts, to best utilize ICTS and to share in
their benefits. Workforces must be trained and well-educated to let the
promise of ICTs flourish. Dr. Marburger noted that, "A vital
communications infrastructure expresses the full range of cultural
imagination, without the divisive barriers of censorship," striking a
blow for freedom of expression and the lifting of control of Internet
content worldwide.

Third, the intellectual property of innovators, content producers, and
generally, consumers, must be protected or there will be insufficient
trust in ICT products and services. Network security on a global scale
informs part of this need -- if no one can trust ICT products and
services, there is no reason to keep building and producing them. (11)

These general policy goals inform all of our ICT development efforts.

**II. The Case for Wireless**

Text messaging, fixed wireless infrastructure, growth of
third-generation technologies and applications, and now Wi-Fi
connectivity---these are all trends found in the developing economies.
In recent years, the influx and importance of wireless technologies for
worldwide ICT growth is often measured by the percentage of fixed versus
mobile subscribers in any given country. The International
Telecommunication Union (ITU) closely tracks these figures. Since 2001,
mobile subscribers have passed the 50 percent mark, with cellular mobile
subscribers now standing at 51 percent of all telephone subscribers
worldwide at year-end 2002. (12)

What is very revealing is to see what geographical regions have high
cellular penetration levels: those regions with a high percentage of
developing economies. See Table I. Some of the growth figures are
staggering. China, considered a developing economy by many, expects 400
million mobile subscribers by 2005. (13) Uganda had 5,000 cellular
subscribers in 1997, and 393,000 in 2002, for a compounded annual growth
rate (CAGR) of 139.4 percent. Paraguay had 84,000 cellular subscribers
in 1997, which grew to 1.7 million in 2002, at a CAGR of 81.7 percent.
(14)

TABLE I: *Cellular Penetration Levels -- World Regions*

![](media/image1.wmf){width="3.3430555555555554in"
height="2.279166666666667in"}

*Source: ITU, December 2003.*

Twelve countries have surpassed the 80^th^ percentile for cellular
subscribership as a percentage of total telephone subscribers. See Table
II.

Table II: *Countries Over 80 Percent Cellular Subscribers as Percentage
of Total Telephone Subscribership*

![](media/image2.wmf){width="3.3430555555555554in"
height="2.279166666666667in"}

*Source: ITU, December 2003.*

But everything is not roses and poetry when it comes to deployment of
wireless technologies in developing countries. In the case of WiFi,
there are many grey areas in domestic laws in overseas markets. Some
countries interpret new technologies such that, if it isn't banned, go
ahead and pursue it. More likely, though are cases such as Kenya (15)
where if it a technology is not specifically allowed, or a frequency is
not specifically allocated for licensing, it is forbidden. Such policies
are often adopted by governments that are trying to protect legal
monopoly and state-owned services providers. The U.S. Embassy in Albania
notes that in Albania, "wireless technology is used only by those who
can afford it, such as banks, government agencies, and international
organizations. Today there are fewer than 50 clients that use this
technology...." (16) Since wireless is usually a less costly solution
for connectivity needs, these examples underlies the issue of
scalability, the need for regulatory reform and pro-competitive supply
models.

In the case of Senegal, it is a grey area. An interagency team including
technical experts from ITS, NIST and State have been working in recent
months on a WiMAN (Wireless Metropolitan Access Network) project to see
if it might take root in Senegal. However, under Senegalese law and
policy, there are no legal specifications yet for WiFi or WiMAN
provisioning. The U.S. Government and its U.S. AID contractors are now
working with the new Senegalese regulatory body to address how best to
pursue such technology-neutral development policies as the regulator
oversees the introduction of competition into telecom services
provisioning in 2004.

However, more and more regulators and policy-makers see the potential
for wireless connectivity to promote Internet uptake. WiFi, WiMAN,
whatever label you choose, the pundits foresee strong prospects. In July
2003, Pyramid Research forecast there will be 700 million WiFi users
worldwide by 2008. (17) Clearly, countries will have to find novel ways
to address the WiFi situation through appropriate policy and regulatory
approaches.

**III. Some Principles & Best Practices**

The U.S. Government pursues a variety of paths on the pro-development
agenda for ICTs. There are the traditional aid organizations and funding
initiatives. Also, NTIA joins our colleagues in the State Department,
the Federal Communications Commission, the U.S. Trade Representative's
Office and the International Trade Administration to promote
pro-competitive policy and regulatory reform around the world. We work
in partnership with recipient countries, directly on a bilateral level,
and jointly through multilateral and regional bodies, establishing joint
principles for action and best practices resources.

Following the 1998 ITU World Telecommunication Development Conference,
NTIA became the rapporteur for a joint public-private sector effort to
promote Internet access in developing countries. Participants performed
a technology review and made recommendations to develop pro-competitive
telecommunications policies and regulations. The result was the 2001
release of "*Promotion of Infrastructure and Use of the Internet In
Developing Countries,"* better known as Study Question 13/1.

The report noted that many factors limit access to and use of the
Internet, particularly in developing countries. These include
restriction of ISPs and public Internet access points, restricted access
to international gateways, insufficiency of Internet points of presence
in rural and disadvantaged communities, inadequacy in advanced
networking techniques, and regulatory policies that favor telephone
monopolies. The technology review included such wireless options as: 1)
VHF and UHF radio systems using narrow packet radio technology; 2)
Global System for Mobiles (GSM400) using packet switching technology;
3)Time Division Multiple Access (TDMA) based on Point-To-Point (PTP) or
Point-to- Multipoint (PMP) Radio Systems; 4) Code Division Multiple
Access (CDMA) 450 MHZ; 5) Multipoint Multichannel Distribution System
(MMDS); 6) Local Multipoint Distribution System (LMDS); 7) Very Small
Aperture Terminals (VSAT),;and 8) Satellite Based Internet Access.

The U.S. Government has endorsed the policy recommendations advanced
under Question 13/1, which include:

-   Make leased lines available at reasonable cost and access charges
    for dial-up services affordable

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-   Enable submarine cable operators to obtain backhaul at competitive
    rates

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-   Promote satellite interconnection between ISPs

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-   Allow network providers to sell capacity directly to ISPs

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-   Lower custom tariffs and taxes on telecommunications equipment

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-   Promote private investment in telecommunications and Internet
    infrastructure

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-   Establish a consortium of public service institutions to contribute
    to Internet access, use and development

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-   Encourage the development of information strategies and models that
    facilitate community access

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-   Develop national programs to promote capacity building in Internet
    development and use, and the creation and dissemination of
    multicultural and multilingual Internet content. (18)

At the same time that the U.S. Government was pursuing Internet
development policies at the ITU, we also worked with the 21-member Asia
Pacific Economic Cooperation forum, or APEC. NTIA helped steer the
APEC's Telecommunications and Information Working Group's (TEL) efforts
to develop a Digital Divide Blueprint for Action, adopted in 2001.
Approximately 12 APEC economies are considered developing economies
(depending on one's view regarding China). As part of that effort, the
TEL gained consensus on six policy principles to help improve Internet
uptake and investment in new ICT technologies.

These focus on:

-   Leadership -- noting governments should create national, regional,
    and local initiatives to create a vision and to develop institutions
    and structures to address issues;

-   Partnerships -- economies should work to create partnership between
    and among business, education, civil society, and government;

-   Policy Coherence - governments should ensure that all policies
    (macroeconomic, social, educational, etc.) are working seamlessly to
    create the desired economic and social environment;

-   Market Focus -- governments are encouraged to promote
    pro-competitive equipment provisioning and services supply
    environments, to foster demand that can justify the investment
    required.

-   Sustainability -- all parties should work to ensure the continuation
    of initiatives and services beyond the seed money stage; and

-   Scalability -- designers of initiatives and projects should work to
    ensure that these can be remodeled and replicated for other
    applications and geographic areas, especially under-served
    communities. (19)

In the Western Hemisphere, the U.S. Government works primarily with the
Inter-American Telecommunications Commission, or CITEL, to promote a
pro-development agenda. Under the auspices of the Organization of
American States, the 35-member states of CITEL strive to make
telecommunications a catalyst for the dynamic development of the
Americas.

One of the CITEL's prime development activities is the release of "The
Blue Book," or "*Telecommunication Policies for the Americas Region."*
Released jointly by the ITU's Development Sector, the Blue Book gives a
fresh perspective on best practices and provides a baseline for
discussion on the impact of convergence and the Internet. There is a
strong focus on legislative, policy and regulatory environments.
Countries can avail themselves of the Blue Book as they think fit, in
accordance with their own national public policy and juridical,
administrative and social framework. The Bluebook is a dynamic
instrument, subject to periodic review; a third edition is now under
development. CITEL has also performed detailed studies on best
practices, conducted jointly with the ITU's Development Sector, on
Tele-Education, on Tele-Medicine, and on Universal Service. (20)

**IV. The Digital Freedom Initiative**

The U.S. Government's most recent effort to promote ICT development
worldwide is through the Digital Freedom Initiative, or DFI. We are fast
approaching the first anniversary of the DFI. In fact, it coincides with
the ISART Conference, on March 4. The goal of the DFI is to promote
economic growth by transferring ICT benefits to entrepreneurs and small
businesses in the developing world. The DFI approach leverages the
leadership of the U.S. Government with the creativity and resources of
America's leading companies and the vision and energy of entrepreneurs.
The first DFI effort was launched mid-year 2003 in Senegal, with new
efforts underway in Peru in November 2003, and in Indonesia in January
2004. We expect an additional five countries to be named in 2004, and up
to 20 countries by 2008.

DFI's implementation depends on an alliance between U.S. private sector
companies, the U.S. Government, the host government, and the host
private sector. The private sector is a key pillar of the DFI's
sustainability. We strive to incorporate private sector strategic
thinking and business savvy to develop replicable and scalable
solutions.

The U.S. Government and especially NTIA are drawing upon its experiences
in the ITU, APEC, CITEL and through bilateral experiences to inform the
DFI process. In addition to the traditional aid agencies such as US AID,
the Peace Corps, and the State Department, new DFI partners include the
Federal Communications Commission, NTIA, and the International Trade
Administration, all under the leadership of the U.S. Commerce
Department's Technology Administration.

While we are in early days for Peru and Indonesia, we have done
extensive design work in Senegal for three pilot projects. These pilots
focus on improving productivity in Telecenters/Cybercafes, improving
access to markets for Small and Medium-Sized Enterprises (SMEs) using
ICT tools, and creating a supportive environment for micro-finance in a
region where banking is centralized in a neighboring country. Recent
successes include the inauguration of a Cisco Networking Academy in
December 2003, and the formation of a new association to represent the
views of the users community before the government, called SITSA (French
acronym), the Senegalese equivalent of the Information Technology
Association of America.

In terms of policy and regulatory development, U.S. agencies have worked
closely with senior Senegalese policy officials, and a new Senegalese
regulatory team, to complete draft decrees and undertake the legal
legwork needed to bring a new legal framework to fruition. This new
framework will guide the introduction of full competition into the
Senegalese telecommunications market, where a privatized former
state-owned enterprise still controls most telecommunications market
segments. The United States also sponsored capacity-building workshops
for the new regulatory team. The onus has now shifted to Senegal to
announce its next steps to implement the new legal framework.

And as mentioned before, U.S. Government technical experts participating
in the Senegal initiative are developing a feasibility study plan for
next-generation wireless technology, to include 802.16 WIMAN
technologies. U.S. participants note how well-suited wireless
technologies are to accomplish the goals of DFI, offering greater
connectivity at greatly reduced prices to both the builders and
consumers of the service. The point-to-multipoint capabilities of
wireless technologies over diverse geographical areas and long distances
make them attractive in Senegal. Our experts' objective is to develop
costing models and a testbed that could then be replicated in additional
DFI candidate countries in the future. First steps in Senegal include
the use of WIMAN technology to connect an existing Wireless Internet
Service Provider (WISP), or a traditional ISP or Internet café
entrepreneur. Project participants would provide equipment and training
as needed with the dual goals of extending connectivity while developing
a more dense user base. Technical configurations and a business model
will be developed jointly with local entrepreneurs to ensure
sustainability and consistent service levels. The team will also work
with the local regulator and incumbent operators to ensure there is
truly a competitive environment and a supportive regulatory environment
to allow WIMAN to flourish. Timeframes to implement the study are still
under development.

To celebrate the DFI's first anniversary, the U.S. Department of
Commerce's Under Secretary for Technology, Phillip Bond, plans to lead a
delegation to Dakar, Senegal between March 8-12, 2004. Members of the
DFI Business Roundtable will accompany him, demonstrating the joint
public-private nature of the initiative.

**V. Going Forward**

Aside from further pursuit of myriad new activities under the DFI, the
U.S. Government has other new ICT development activities.

At WSIS, the United States pledged US\$400 million in grant money to
support ICT development in developing countries. The U.S. Government's
Overseas Private Investment Corporation (OPIC) has established a
"support facility" to encourage U.S. investment in the sector, at a time
when capital expenditures are down globally for ICT development. The
grants will fund joint ventures between the public and private sectors
in the 152 countries where OPIC operates. (21)

Also, collaboratively, the NTIA is chairing a new ITU effort to develop
a best practices resource entitled "IP Policy Manual." The manual will
advise ITU Member States on a variety of Internet issues such as domain
names management. It has a particular focus on the needs and questions
of developing countries.

NTIA continues to provide assistance to the reconstruction of
Afghanistan and now Iraq. We have met with senior Afghani ministry
officials to provide advice on implementation of their new development
plans. In Iraq, we will shortly detail an NTIA wireless policy expert to
assist in general telecommunications policy reform and reconstruction
efforts. He will supplement the efforts of a current detailee from our
spectrum management office, who is assisting on spectrum activities for
the Coalition Provisional Authority. They are only an email away. Let's
hope their Blackberries work over there.

**End Notes**

1.  Ministry of Information Industry (MII) of China, at U.S.-China ICT
    Seminar, January 13, 2004.

2.  GSM Association, January 26, 2004.

3.  Technology Opportunities Program (TOP), National Telecommunications
    and Information Administration.

4.  U.S. Embassy Dushanbe, Tajikistan.

5.  U.S. Embassy Yerevan, Armenia.

6.  Technology Opportunities Program

7.  Marburger, John, Director, Office of Science and Technology Policy,
    Executive Office of the President, USA.

8.  Ministry of Information Industry.

9.  "ITU Secretary-General Opens First Global Information Summit,"
    December 10, 2003.

10. *Ibid.*

11. Marburger.

12. International Telecommunication Union, *World Telecommunication
    Indicators.*

13. China Unicom, at U.S.-China ICT Seminar, January 13, 2004.

14. *World Telecommunication Indicators.*

15. U.S. Embassy Nairobi, Kenya.

16. U.S. Embassy Tirana, Albania.

17. Pyramid Research, "Pyramid Predicts 700 Million WiFi Users by 2008,"
    July 23, 2003.

18. International Telecommunication Union*, Promotion of Infrastructure
    and Use of the Internet In Developing Countries.*

19. Asia Pacific Economic Cooperation (APEC) Telecommunications and
    Information Working Group (TEL).

20. Inter-American Commission for Telecommunications (CITEL).

21. U.S. State Department, http://www.state.gov/e/eb/cip/wsis/.

**Resources and Bibliography**

Asia Pacific Economic Cooperation (APEC) Telecommunications and
Information Working Group (TEL). At
[www.apectelwg.org](http://www.apectelwg.org/).

Digital Freedom Initiative, www.dfi.gov.

GSM Association, "GSM on Target to Connect Billionth Customer in Q1,"
GSM Association Press Release, January 26, 2004, at
<http://www.gsmworld.com/news/press_2004/press04_06.shtml>.

Inter-American Commission for Telecommunications (CITEL)
([http://citel.oas.org](http://citel.oas.org/)).

*- The Blue Book: Telecommunication Policies for the Americas Region (*
[http://www.intu.int](http://www.intu.int/))

\- *Tele-Education in the Americas*
[http://citel.oas.org/Tele-Education/Table%20of%20Content.asp](http://citel.oas.org/Tele-Education/Table of Content.asp)

\- *Universal Service in the Americas*
<http://citel.oas.org/pubs/universal_service.asp>

International Telecommunication Union, Geneva, Switzerland.

\- *IP Policy Manual,* at
<http://www.itu.int/ITU-T/special-projects/ip-policy/index.html>

\- "ITU Secretary-General Opens First Global Information Summit,"
December 10, 2003.

<http://www.itu.int/wsis/geneva/newsroom/press_releases/wsisopen.html>.

*- Promotion of Infrastructure and Use of the Internet In Developing
Countries,* ITU Development

Sector, Document 1/185(Rev.1)-E, 24 October 2001 at
[www.itu.int](http://www.itu.int/).

\- *World Telecommunication Indicators*, December 2003.
<http://www.itu.int/ITU-> D/ict/statistics/at_glance/cellular02.pdf

Marburger, John, Director, Office of Science and Technology Policy,
Executive Office of the President, USA. "Information and Communication
Technology is a Key to the Future Prosperity of All Nations." Statement
before the World Summit on the Information Society, December 11, 2003.
http://www.state.gov/e/eb/rls/rm/2003/27670.htm.

Ministry of Information Industry (MII) of China, at U.S.-China ICT
Summit, January 13, 2004, Washington, D.C. Author's personal notes from
attendance.

Pyramid Research, Cambridge, MA. "Pyramid Predicts 700 Million WiFi
Users by 2008," July 23, at
<http://www.pyr.com/info/press/release_030721.asp>.2003.

Technology Opportunities Program (TOP), National Telecommunications and
Information Administration, Washington, D.C. At
http://ntiaotiant2.ntia.doc.gov/top/2003/index.cfm.

U.S. Embassy Dushanbe, Tajikistan. "Tajikistan: Wi-Fi Survey Response."
Cable number 2633, May 21, 2003.

U.S. Embassy Nairobi, Kenya. "Kenya: Wireless Internet Survey." Cable
number 1848, May 6, 2003.

U.S. Embassy Tirana, Albania. "Responses to Wireless Internet Survey."
Cable number 717, May 5, 2003.

U.S. Embassy Yerevan, Armenia. "Armenia: Response to Wireless Internet
Survey." Cable number 996, May 16, 2003.

World Summit on the Information Society, First Phase, December 10-12,
2003, Geneva. At <http://www.itu.int/wsis/>. See also at U.S. State
Department, http://www.state.gov/e/eb/cip/wsis/