In fact, this infrastructure is growing the fastest in countries where the state has privatized the telecommunications industry, lowered tariffs on information technology products, and allowed free competition in data network services. Inexpensive PCS will do little good, however, if the cost of long-distance telephone connections required to access the Internet remain as high as they are today. As Chile, Mexico, Per , Argentina and other countries have shown, privatization is the most efficient way to infuse new technology and services into the telecommunications infrastructure. Still, for the next few years many of the newly privatized telephone companies will be protected by full or partial monopolies that were necessary to attract serious investment. This could slow the expansion of Internet and data networking services, unless governments make it a point to allow new entrants in these niches.
Chile offers eloquent proof of the benefits of fully liberalizing the communications market.
Chilean consumers and companies enjoy some of the world's lowest telephone rates. As a result, Chile has more than twice as many Internet host computers per 1,000 inhabitants as any other major Latin American country. The growth of Latin America's information infrastructure faces constraints that transcend national boundaries, however. This detour slows transmission times and greatly increases the costs of the region's Internet access providers. Three factors are expected to alleviate this problem over the next decade.