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Information Technology Policy and the Digital Divide

Lessons for Developing Countries

Edited by Mitsuhiro Kagami, Masatsugu Tsuji and Emanuele Giovannetti

The proliferation of new information technologies throughout the world has raised some important questions for policymakers as to how developing countries can benefit from their diffusion. This important volume compares the advantages and disadvantages of the IT revolution through detailed studies of a variety of developed and developing nations and regions: Argentina, Estonia, the EU, India, Japan, Korea, Mexico, South Africa, Thailand and the USA.
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Chapter 3: Internet Upstream Connectivity and Competition Policy: Western Europe and Southern Africa

Emanuele Giovannetti


Emanuele Giovannetti* It was just a length of cable dangling from a ship off the coast of South Africa that ran along the bottom of the sea and then up onto shore here on June 19, like a mooring line ... It established a key beachhead for an advanced undersea communications cable that by year’s end will give sub-Saharan Africa its first world-class connections to the global telephone network and the Internet. Hiawatha Bray, From the Boston Globe, 22 July 2001. 1. INTRODUCTION While a rich and varied economic debate has developed on the issues of liberalization of the telecom market and its relation to the costs, and therefore diffusion, of the Internet, little has been done on its less known side: the upstream connectivity required by Internet service providers to reach the rest of the Internet. While in its infancy Internet connectivity between different networks was mainly a technical problem and was taking place on a cooperative base at public exchanges, commercialization of the Internet, and a progressive wave of mergers and acquisitions, have deeply changed the way information packets travel across the different networks composing the Internet. In particular, while major backbones still exchange traffic free of charge amongst themselves, they started charging for transporting information from smaller providers, who can only achieve global Internet connectivity by using these backbones. Also, the evolution toward quality and delay sensitive Internet applications, in other words, video on demand, voice over IP and secure e-commerce transactions, is prioritizing the quality aspects of...

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