<div dir="ltr">An alternative view of the Global Connect Initiative.<div><div>This is Part 1 of 2.<br><div>Deirdre<br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Dave Burstein</b> <span dir="ltr"><<a href="mailto:daveb@dslprime.com">daveb@dslprime.com</a>></span><br>Date: 1 December 2015 at 06:56<br>Subject: [bestbits] Moving towards active development support in GLOBAL CONNECT<br>To: Carolina Rossini <<a href="mailto:carolina.rossini@gmail.com">carolina.rossini@gmail.com</a>><br>Cc: "<<a href="mailto:bestbits@lists.bestbits.net">bestbits@lists.bestbits.net</a>> <a href="mailto:bestbits@lists.bestbits.net">bestbits@lists.bestbits.net</a>>" <<a href="mailto:bestbits@lists.bestbits.net">bestbits@lists.bestbits.net</a>>, "<a href="mailto:redlatam@lists.accessnow.org">redlatam@lists.accessnow.org</a>" <<a href="mailto:redlatam@lists.accessnow.org">redlatam@lists.accessnow.org</a>>, "<a href="mailto:marcocivil@listas.ensol.org.br">marcocivil@listas.ensol.org.br</a>" <<a href="mailto:marcocivil@listas.ensol.org.br">marcocivil@listas.ensol.org.br</a>>, "<a href="mailto:IP-ENFORCEMENT@ROSTER.WCL.AMERICAN.EDU">IP-ENFORCEMENT@ROSTER.WCL.AMERICAN.EDU</a>" <<a href="mailto:IP-ENFORCEMENT@roster.wcl.american.edu">IP-ENFORCEMENT@roster.wcl.american.edu</a>>, "<a href="mailto:infosoc@tacd.org">infosoc@tacd.org</a>" <<a href="mailto:infosoc@tacd.org">infosoc@tacd.org</a>>, "Bhardwaj, Manu" <<a href="mailto:bhardwajm@state.gov">bhardwajm@state.gov</a>><br><br><br><div dir="ltr"><div class="gmail_extra"><div style="font-family:verdana,sans-serif">Carolina, Manu and all</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">Like Carolina, I apologize for any cross posting.</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">With respect, I profoundly disagree with the U.S. approach. I will only speak briefly on this call because there is an agenda to move. I do hope you will consider a different approach, grounded in the economics and technical requirements. </div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">I'm writing about developing affordable networks for all. Human rights are also important but I bring no special expertise to that subject.</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">Theme: <b>The role of Americans and I believe my government should be to support the needs of poorer countries, not to drive the agenda in our preferred paths.</b></div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">First. We should recognize that the folks who have built MTN to almost 200 million subscribers know a heck of a lot more about how to build affordable networks than I do. That's true for virtually any of the other lawyers and policy people working thousands of miles away. Bharti is serving more customers than AT&T & Verizon combined. They have many peers of exceptional ability. This is just being practical and honest. Most of the real experts are not in New York or in Washington. </div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif"><b>We should concentrate on items in our power to change,</b> like the cost of international transit and the taxes our giant companies do and don't pay. We should not waste our efforts on factors primarily decided domestically, like the level of taxes and subsidies or the structure of the national industry. </div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">(Africa will pass the U.S. in Internet users around 2018. With help from Cisco, I reported that in 2012, one of the first reporters to notice. India is also going to pass the U.S. in about two years. The BRICs already have more Internet users than the U.S. and the rest of Europe combined. Every quarter, the Global South is adding 10-20M more Internet users than the North.)</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">Second. My personal belief is that <b>the U.S. and Americans should primarily work on what we can do</b>,<b> not what we are urging others to do.</b> In particular, we should change policies that divert funds from poorer countries to richer ones. Our companies need to follow principles of fair trade and dealings. They should support the economies in which they are doing business.</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">These wouldn't seem to be particularly controversial but lead to very different policies than our current ones.</div><div style="font-family:verdana,sans-serif">--------------------------</div><div style="font-family:verdana,sans-serif">For three years, I've been asking engineers and business people what are the largest issues raising network costs and reduce Internet use. The Africans have shown particular wisdom. This is what I've been learning. Please add your suggestions. We need a Code of Conduct here. </div><div style="font-family:verdana,sans-serif"><br></div><ul><li><b>High backhaul/transit costs double or triple the cost of providing broadband in most of Africa. </b>A megabit costs $0.50-$3 in most of the U.S. and much of Europe. The same megabit in Lagos on 2014 cost $170, 100x as much. 50-90% of the difference is cartel pricing, based on undersea costs where there is more competition.<div style="font-family:verdana,sans-serif;display:inline"> </div>We should support national efforts for bargaining leverage. Our companies should not use their market power to gouge. (This is by far the largest factor driving up costs. It's the same issue the U.S. Broadband Plan discovered in most badly served rural areas. The Africans have already built dozens of IXC's. It's insulting to pretend they need us to educate them. Unfortunately, while they are generally a good tool, they rarely can solve more than 10%-20% of cost problem here.) <br></li><li><div style="font-family:verdana,sans-serif;display:inline"></div><br></li><li><b>Multinational giants should pay reasonable taxes. </b>The U.S. should make i<div style="font-family:verdana,sans-serif;display:inline">t</div>so. Facebook & Google tax avoidance is far higher than their "charitable endeavors." Most African leaders will tell you they don't need charity, just a fair deal on taxes and trade. France and England can't get Google or Apple to pay taxes. What chance does Cameroon or Thailand have without strong support from the giant's home countries? Changes in telecom pricing have sucked hundreds of millions in taxes/fees and probably more from some of the poorest countries.<br></li><li><br></li><li>Columbia Professor Raul Katz just did an important study that concluded Internet companies are making enormous profits in middle income countries. The products have mostly been developed and paid off in richer countries and at most a skeleton staff does things like sellnig some advertising. In one example, Katz found a company like Facebook is probably earning an 80% return.<br></li><li><br></li><li>Multinationals should hire and invest in the countries in which they do business. In years gone past, companies like IBM made sure to invest where they sold. There are 130M? Facebook users in India. Many of them can code, sell and manage.<br></li></ul><div style="font-family:verdana,sans-serif">Looking a little further ahead, two enormous problems are developing. </div><div style="font-family:verdana,sans-serif"><br></div><ul><li><b>High royalties may soon double or triple the cost of a low end smartphone. </b> Hundreds of millions fewer people will connect. Carlos Slim of Telmex told me at the Broadband Commission the $50 smartphone will connect two billion more people. On a mass product like a smartphone, a "reasonable" royalty would be something like 5-10%. Intel calculates royalties may soon be $140 on a mid-priced phone. On inexpensive phones, Microsoft, Qualcomm and similar royalties may be more than the total cost to build it. Every international agreement calls for "reasonable" royalties and it's time to make that so.<br></li></ul><div style="font-family:verdana,sans-serif"><span style="color:rgb(0,0,0);font-family:Verdana,Arial,Helvetica,sans-serif;font-size:16px"><br></span></div><div><ul><li style="font-family:verdana,sans-serif"><b><span style="color:rgb(0,0,0);font-family:Verdana,Arial,Helvetica,sans-serif;font-size:16px">Some companies </span>have</b><span style="color:rgb(0,0,0);font-family:Verdana,Arial,Helvetica,sans-serif;font-size:16px"><b> developed enormous market power. </b>We all hate unnecessary regulation but also learned in our first economics class how damaging a monopoly can be. Columbia Professors Eli Noam and Raul Katz are doing seminal work on how Internet companies with scale have enormous cost advantages and have often developed "monopoly-like" pricing power. That scale will continue to make it hard or impossible for new companies to succeed. Google has a reported 90% market share in search in Europe. Facebook has more active users in India than there are broadband connections including wireless. </span><span style="color:rgb(0,0,0);font-family:Verdana,Arial,Helvetica,sans-serif;font-size:16px">How many substantial competitors have developed to Google and Facebook the last five years? Almost none. </span></li></ul></div><div style="font-family:verdana,sans-serif">-------------------------------------------</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif">While the American proposals place importance on human rights, the Core Principles do almost nothing practical for development. They need to be made concrete and clear.</div><div class="gmail_quote"><div><br></div><div><div style="font-family:verdana,sans-serif">Let's look at the proposals</div><br></div><div> </div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex"><div dir="ltr"><div><div class="gmail_extra"><div class="gmail_quote"><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex"><div><div><div class="gmail_extra"><div class="gmail_quote"><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;padding-left:1ex"><div dir="ltr"><div><b><font face="arial, helvetica, sans-serif">III - Core Principles</font></b></div><div><font face="arial, helvetica, sans-serif"><br></font></div><div><font face="arial, helvetica, sans-serif">The core principles of this initiative are: </font></div><div><font face="arial, helvetica, sans-serif"><br></font></div><div><font face="arial, helvetica, sans-serif">1) Countries integrate Internet connectivity as a key part of their national development strategy and budget process and consult with all stakeholders in doing so;<br></font></div></div></blockquote></div></div></div></div></blockquote></div></div></div></div></blockquote><div><br></div><div><div style="font-family:verdana,sans-serif">Nearly every country has produced broadband plans doing just this. ICT is an enormous part of the government strategy from Rewanda to India tp Mexico. Ho Hum</div><br></div><div><br></div><div> <span style="font-family:arial,helvetica,sans-serif">2) International financial institutions and international development organizations prioritize digital access, including in the projects they support;</span></div><div><br></div><div><div style="font-family:verdana,sans-serif">The World Bank has done just that for over a decade. HoHum</div><br></div><div><br></div><div> <span style="font-family:arial,helvetica,sans-serif">3) All stakeholders promote the linkage between the use of technology, expression, transparency and innovation; and the overall social, economic, and political benefits reaped from connectivity;</span></div><div><br></div><div style="font-family:verdana,sans-serif">To the extent this relates to human rights, I defer to those with greater expertise.</div><div style="font-family:verdana,sans-serif"><br></div><div style="font-family:verdana,sans-serif"></div></div></div><span style="font-family:arial,helvetica,sans-serif">4) All stakeholders promote dialogue and action on how to harness, deploy, and enable innovative technologies to support quality, affordable and sustainable connectivity for the unconnected, particularly in power-deficient communities.</span><br><div class="gmail_extra"><div class="gmail_quote"><div><div><div class="gmail_extra"><div class="gmail_quote"><div><div><div class="gmail_extra"><div class="gmail_quote"><div><div><span style="font-family:verdana,sans-serif"><br></span></div><div><span style="font-family:verdana,sans-serif">The last thing we need is more dialogue. From the Internet Society to WSIS to the ITU, </span>everybod<div style="font-family:verdana,sans-serif;display:inline">y</div><span style="font-family:verdana,sans-serif"> <div style="font-family:verdana,sans-serif;display:inline">has talked and talked. </div></span></div></div><div><span style="font-family:verdana,sans-serif"><div style="font-family:verdana,sans-serif;display:inline">We do need action, but neither here nor in the longer version did I find anything concrete or new likely to make much of a difference.</div></span></div></div></div></div></div></div></div></div></div></div></div><div class="gmail_extra"><div><div dir="ltr"><br></div></div>
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