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1 IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES BILL LUTHER FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 2004

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Page 1: IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES

1

IT & TELECOMMUNICATIONSIMPACT ON DEVELOPING

COUNTRIES

BILL LUTHERFEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C.2004

Page 2: IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES

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EDUCATION(THE ACADEMIC COMMUNITY IS

THE STARTING POINT)

HEALTH SERVICES

TELECOMMUNICATIONS

TRANSPORTATION (ROADS,RAIL, AIR)

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TOPICS FOR DISCUSSION• POLICY OBJECTIVES• UNIVERSAL SERVICE AND UNIVERSAL ACCESS• INTERNET - WHAT DOES IT MEAN?• INTERNET CONCERNS• IP TELEPHONY• DIGITAL DIVIDE• SATELLITE AND INTERNET INDUSTRIES• WTO AGREEMENT• IP VIA SATELLITE• S-CURVES• WWW SITES• SATELLITE COLLISION PROBLEM

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POLICY OBJECTIVES• FOSTER COMPETITIVE AND

INNOVATIVE INTERNET CONNECTION,AND MULTIMEDIA INDUSTRIES

• MINIMIZE REGULATION AND ENACTFLEXIBLE REGULATORY POLICIES

• PROMOTE MARKET ACCESS ANDADOPTION OF OPEN, NON-DISCRIMINATORY, TRANSPARENTPOLICIES

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UNIVERSAL SERVICE ANDUNIVERSAL ACCESS

• IT IS UNDERSTOOD THAT MARKETSOLUTIONS WILL NOT ENSURETHE EXPANSION OF NETWORKS TOECONOMICALLY LESS VIABLE(RURAL) AREAS

• UNIVERSAL SERVICE ORUNIVERSAL ACCESS OBLIGATIONS,AND FUNDING ARE A NATIONALPOLICY ISSUE

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INFORMATION ANDCOMMUNICATIONS TECHNOLOGY

FACTORS FOR ACCESS

SOURCE: ITU.

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INTERNET

THE INTERNET HAS ENABLED THECREATION OF BUSINESSES

WITHOUT MUCH CAPITAL. IT HASENLARGED THE COMPETITION - -NOT ONLY THE SHOP DOWN THE

STREET BUT THE SHOP HALFWAYAROUND THE WORLD.

GEOGRAPHICAL BOUNDARIES AREDISAPPEARING.

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THE INTERNETREVOLUTION

• A STUDY IN YEAR 2000 CALCULATED THAT USEOF INTERNET E-MAIL IN THE U.S. INCREASEDPRODUCTIVITY OVER YEAR 1999 BY A VALUEOF $13,000 PER EMPLOYEE

• THE SAME STUDY FOUND THAT EMPLOYEESSAVE 326 HOURS PER YEAR BY USING E-MAIL(THERE ARE 2100 HOURS IN THE U.S.GOVERNMENT WORK YEAR)

• NOT WITHOUT A DOWNSIDE, THE SAME STUDYFOUND THAT EACH EMPLOYEE WASTES 115HOURS PER YEAR WITH PERSONAL E-MAILAND COPING WITH SPAM

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DAILY E-MAIL GROWTH

1999 - 3.5 BILLION

2003 - 11 BILLION

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DOMAINS

.AERO .INFO

.ARPA .INT

.BIZ .MIL

.COM .NET

.COOP .MUSEUM

.(COUNTRY CODES) .NAME

.EDU .ORG

.GOV .PRO

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INTERNET CONCERNSFRAUD

CYBERSTALKING

SECURITY

GAMBLING

MONEY LAUNDERING

DRUG TRAFFICKING

PORNOGRAPHY

TAXES

SPAM

QUALITY

INTELLECTUAL PROPERTY RIGHTS

Page 12: IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES

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IP TELEPHONY AND THEGLOBAL TELECOM

MARKET

YEAR 2000 - GLOBALTELECOMMUNICATIONS MARKET WAS

$1 TRILLION

YEAR 2000 - GLOBAL INTERNETPROTOCOL TELEPHONY (VoIP) MARKET

OF $500 MILLION

(FIVE TEN-THOUSANDTHS OR 0.05%)

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PSTN AND IP TELEPHONY

• PSTN IS BASED ON CIRCUIT-SWITCHED TECHNOLOGY,EVOLVED AS A VOICE NETWORK(HIGHLY REGULATED)

• INTERNET BASED ON PACKET-SWITCHED TECHNOLOGY,EVOLVED AS A DATA NETWORK(LARGELY UNREGULATED)

• INTERNET IN 2000 WAS 3 % OFGLOBAL INTERNATIONAL TRAFFICTOTAL

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PSTN AND IP TELEPHONYRELATIVE COSTS

• IP TELEPHONY (VoIP) CAN BE OFFEREDAT PRICES SIGNIFICANTLY BELOWTHOSE FOR PSTN TELEPHONY

• PSTN PRICING IS DISTANCE- SENSITIVE- - PRICING OF IP TELEPHONY ISLARGELY INDEPENDENT OF DISTANCE(LIKE SATELLITE COMMUNICATIONS)

• VoIP TODAY MEANS A TRADE-OFFBETWEEN QUALITY AND COST

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VoIP VS CIRCUITNETWORK COST

TRADITIONAL TELCOSWITCH

IP TELEPHONY

SOLUTIONINVESTMENTCAPACITYADVANTAGESCLASS 5SWITCHUS $20MILLION20,000 LINES

QUALITY

RELIABILITY

PROVENTECHNOLOGYINTERNETPOPUS $0.1MILLION400,000MINUTES PERMONTH

EFFICIENCY

NEWSERVICESPOTENTIAL

SCALABILITYIP FULLOPERATIONUS $3 TO 5MILLION35 MILLIONMINUTES PERMONTH

IP TELEPHONY

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VoIP PERMITTEDANGOLA ANTIGUA AND BARBUDA ARGENTINA AUSTRALIA AUSTRIA BELGIUM BHUTAN CANADA CHINA CONGO COSTA RICA CYPRUS CZECH REPUBLIC DENMARK DOMINICAN REPUBLIC ESTONIA ETHIOPIA FINLAND FRANCE GAMBIA GERMANY

GREECE GUATEMALA GUYANA HONG KONG SAR HUNGARY ICELAND INDIA IRELAND ITALY JAPAN KENYA KOREA (REP) KYRGYZSTAN LUXEMBOURG MADAGASCAR MALAYSIA MALTA MEXICO MOLDOVA MONGOLIA NEPAL

NETHERLANDS NEW ZEALAND PERU PHILIPPINES POLAND PORTUGAL SINGAPORE SLOVAK REPUBLIC SPAIN SRI LANKA ST. LUCIA ST. VINCENT SWEDEN SWITZERLAND TONGA UGANDA UNITED KINGDOM UNITED STATES VIET NAM

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EUROPEAN COMMISSIONVOICE INTERNET POLICY

INTERNET TELEPHONY IN GENERAL

FALLS OUTSIDE THE DEFINITION OF

VOICE TELEPHONY AND NO SPECIAL

LICENSE IS REQUIRED

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DATA AND TEXT VS VOICE

• SOME COUNTRIES HAVE CHOSENTO PROMOTE INTERNET FOR TEXTAND DATA SERVICES BUT NOT FORVoIP

• MOTIVE MAY BE TO PROTECTINCUMBENT OPERATORS FROMPOTENTIAL COMPETITION

• THOSE OPERATORS MAY BE ILL-PREPARED FOR THE FUTUREGLOBAL ENVIRONMENT

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CONVERGENCE TO INTERNET

• TREND IS TOWARDS THECONSOLIDATION OF VOICE, VIDEO ANDDATA SERVICES IN THE INTERNET

• PROGRESS TOWARD THISCONSOLIDATION WILL BE VIADEVELOPMENTS SUCH AS UBIQUITOUSBANDWIDTH, INCREASED EASE OF USE,GREATER CONNECTIVITY ANDIMPROVED SECURITY

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NEW INTERNET MULTIMEDIAAPPLICATIONS

SOFTWARE TO DOWNLOAD:

• MUSIC• PHOTOGRAPHS• GAMES AND ENTERTAINMENT TO

MOBILE WIRELESS DEVICES• LOCATION-BASED MAPPING• PORTABLE DOCUMENT FORMAT (.PDF)• LINUX• VIRUS PROTECTION• INTERACTIVE MESSAGING

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DIGITAL DIVIDE

• ONLY 5 TO 6 % OF THE WORLD HASACCESSED INTERNET AND 90 % OFTHEM ARE IN INDUSTRIALIZEDCOUNTRIES

• AFRICA AND MIDDLE EASTACCOUNT FOR JUST 1 % OFINTERNET USERS

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PROBLEM AND SOLUTIONSPROBLEM:

TECHNOLOGY HAS WIDENED THE

DIGITAL DIVIDE BETWEEN

DEVELOPED AND DEVELOPING

COUNTRIES.

SOLUTION: *

1. IMPROVE EDUCATIONAL SYSTEMS, AND

2. EXPAND TELECOMMUNICATIONNETWORKS

*ILO at the World Economic Forum, Davos, 2001

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SATELLITE AND INTERNETINDUSTRIES STAND TO MUTUALLY

BENEFIT

• Internet transmission representsfastest growing segment of theFSS industry. (Source: Merrill Lynch)

• Internet traffic over satellitesdoubles every six months. (Source:Industry Reports).

• Internet traffic is projected toconstitute a major revenue streamfor the new generation of satellitesystems in the Ka and V bands.

• Satellites represent the only Internet accessalternative in many rural areas and developingnations.

• Satellites provide instant infrastructure to ISPs.

• Satellites provide a cost advantage over wirelinenetworks in areas with sparse population.

• Satellites provide an efficient means of Internetaccess for customers with asynchronous Internetusage patterns and from the ability to multicastcontent.

• Satellites allow residential and businesscustomers to bypass the local loop with speedshigher than the transmission rate received througha standard phone line.

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WTO AGREEMENT

• OPENS MARKETS FOR BASICTELECOMMUNICATION SERVICES,INCLUDING SATELLITE SERVICESOTHER THAN DTH, DBS, AND DARSSERVICES

• OPENS MARKETS FOR SATELLITESERVICES IN 49 COUNTRIES WHICHREPRESENT 80% OF TOTAL GLOBALMARKET FOR SATELLITE SERVICES

• AGREEMENT SHOULD FOSTERINTERNET VIA SATELLITE INDUSTRY

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IP VIA SATELLITE: ASERVICE EMERGES

0

100

200

300

400

500

600

700

800

1995 1998 1999 2000

ISP Links (US$M)Internet AccessCaching/Usenet

Source: DTT Consulting

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VALUE OF IP VIA SATELLITEMARKET

98.9

269.8

848.2

0

100

200

300

400

500

600

700

800

900

Winter 98 Winter 99 Winter 2000

Source: DTT Consulting (*In Millions of Dollars)

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TELECOMMUNICATIONS ANDSATELLITES

Telecommunications

Wire andfiber

Wireless

Terrestrial Satellite

Geostationary Non-Geostationary

FSS MSS DBS FSS MSS

Page 28: IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES

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DBS(12 - 18 GHz)

DARS(2 GHz)

BSS

C/Ku(3 - 7 GHz) /(12 - 18 GHz)

Ka Band(18 - 30 GHz)

V Band(36 - 51 Ghz)

FSS

1-2 GHzBand

2 GHz (1990-2025 MHz; 2165-2200 MHz)

MSS

GSO

Little Leos(below 1 GHz)

Big Leos(1 - 2 GHz)

2 GHz Band (1990-2025 MHz; (2165-2200 MHz)

MSS

Ku Band(12 - 18 GHz)

Ka Band(18 - 30 GHz)

V Band(36 -51 GHz)

FSS

NGSO

SATELLITE INDUSTRYSTRUCTURE BY BANDS

No licenses have been issued yet.

Page 29: IT & TELECOMMUNICATIONS IMPACT ON DEVELOPING COUNTRIES

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DBS(12 - 18 GHz)

DARS(2 GHz)

BSS

C/Ku(3 - 7 GHz) /(12 - 18 GHz)

Ka Band(18 - 30 GHz)

V Ban(36 - 51 GHz)

FSS

1-2 GHzBand

2 GHz(1990-2025 MHz; 2165-2200 MHz)

MSS

GSO

Little Leos(below 1 GHz)

Big Leos(1-2 GHz)

2 GHz Band(1990-2025 MHz;2165-2200 MHz)

MSS

Ku Band(12 - 18 GHz)

Ka Band(18 - 30 GHz)

V Band(36 -51 GHz)

FSS

NGSO

BANDS CURRENTLY OFFERING OREXPECTING TO OFFER SOME TYPE

OF INTERNET SERVICE

Internet Bands

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BSS

C/Ku(3 - 7 GHz) /(12 - 18 GHz)

FSS MSS

GSO

MSS

Ku Band(12 - 18 GHz)

FSS

NGSO

C & Ku BAND • C and Ku Bandsused by GSO satellitesaccount for most ofthe Internet traffictoday

• Thirty-three 36MHz equivalenttransponders devotedto Internet service(Source: DTT consulting).

• 70% of newtransponder leases areInternet related•(Source: LMGT)

• Direct-to-consumerInternet accessquickly emerging

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BSS

Ka Band(18 - 30 GHz)

FSS MSS

GSO

MSS

Ka Band(18 - 30 GHz)

FSS

NGSO

• Alternative to highlycongested C and Ku Bands

• Ka band systems promiseadvanced, high speednetworks at speeds 64Mbps and over

• Proposed services: highspeed Internet & Intranetaccess; data trunking; videoconferencing; distancelearning; tele-medicine;private data networks

• Currently 9 licensed GSOsystems, and 3 pendingapplications for NGSO

- Recall “Teledesic” (LEOSystem) – license returned

Ka BAND

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BSS

V Band(36 - 51 Ghz)

FSS MSS

GSO

MSS

V Band(36 -51 GHz)

FSS

NGSO

• 16 applicants originallyrequesting V bandspectrum, down to 6 now(2 GSO and 4 NGSO)

• Proposed speeds of 64Mbps and higher

• Proposed servicessimilar to Ka bandofferings, including highspeed Internet access &Intranet; data trunking;video-conferencing

• Industry analystsbelieve the V bandsystems are likely tosupplement the Kasystems currently indevelopment

V BAND

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SATELLITE DTV AND IPIP streamProvider ControlStationServerPacket IPIPIPIPIPIPIPInternet Backbone NetworkInternetUserIP streamIP stream

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VSAT TERMINAL PRICING TRENDS

0

2

4

6

8

10

12

14

16

18

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

U.S

. Do

llars

x 1

0-3

Ku-band

C-band

Source: COMSYS

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INTERNET ACCESS VIASATELLITE (GSO)

GILAT - - FIRST TO SERVICE (V-SAT)

STARBAND - - YEAR 2000

DIRECT PC - - YEAR 2000

BOEING CONNEXION (AIRCRAFT) - - 2003

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GEOSTATIONARY ORBIT SATELLITES

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GENERIC “S-CURVE”

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GROWTH OF U.S. WIRELESSPENETRATION

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“S-CURVES” FOR VARIOUSTECHNOLOGIES

0

10

20

30

40

50

60

70

80

90

100

1920

1925

1930

1935

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

Ho

use

ho

ld P

enet

rati

on

Rat

e

Telephones

Electricity

TV's (Color)

Cable (basic)

VCR's

PC's

Internet Access

Electricity

Telephone

Television

Cable

VCRs

PCs

Internet

Sources: Telephone and electricity industry data from 1920-1970 from Historical Statistics of the United States: Colonial Times to 1970, Part 2, p. 783. 1970-present and from Statistical Abstract of the United States, various years. Cable data from A.C. Nielsen Co. data as reported by the National Cable Television Association (NCTA). VCR, PC, and TV data from Consumer Electronics Association, E-Brain (http://www.ebrain.org/). Internet data from U.S. Department of Commerce (http://www.ntia.doc.gov/ntiahome/fttn00/chartscontents.html).

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GLOBAL DIGITAL MOBILE ANDINTERNET PENETRATION

0

2

4

6

8

10

12

14

16

18

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

YEAR

Pe

ne

tra

tio

n p

er

10

0 In

ha

bit

an

ts

Mobile Telephone Penetration Internet Penetration

Source: ITU World Telecommunication Indicators Database.

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GLOBAL S-CURVES: 1950-2001

0

1

2

3

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Lin

es/

Use

rs (

bill

ion

s)

Fixed Lines Mobile Phones Internet Users

Internet U se r s

Mobile Phones

Fixed Lines

Source: ITU World Telecommunication Indicators Database.

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WWW SITES OF INTEREST

WWW.CNN.COM

WWW.ERO.DK

WWW.IARU.ORG

WWW.ITU.INT

WWW.FCC.GOV

WWW.RSSI.RU

WWW.SPACECOM.AF.MIL

WWW.SEC.NOAA.GOV

STRATEGIS.IC.GC.CA

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SATELLITE PROBLEMINTERESTING FACTS:About 180 satellites in geostationary orbitTangential velocity on Earth at the equator is about 1000 m/h (0.44 km/s)Tangential velocity at GSO is about 6575 m/h (3 km/s)

RELEVANT FACTS:Diameter of Earth = 8000 miles (12,800 km)Geostationary orbit (GSO) above Earth = 22,300 miles (35,680 km)International (ITU) standard for GSO stationkeeping is +/- 0.1 degree N-S

and E-W (now subject to further study for debris ammelioration)

QUESTION:What is the approximate probability of a collision between GSO satellites

given a requirement for 2 degree satellite spacing?

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ONE SIMPLE SOLUTION• CALCULATE ANGULAR DISTANCE

(CONSIDER AS LINEAR) FOR 2 DEGREES ATGSO

• ASSUMING +/- 0.1 DEGREE TO DEFINE ASTATIONKEEPING SOLID ANNULAR RING(CYLINDER), CALCULATE VOLUME OF THECYLINDER

• ASSUME SATELLITES CAN BE REPRESENTEDBY A CYLINDER OF 50 m LENGTH AND 4 mDIAMETER, CALCULATE RATIO OF VOLUMESOF THE TWO CYLINDERS