You may have heard rumblings of a tech boom beginning in Africa: there’s the much noted “Silicon Savannah” in Kenya, a country that The Economist reports has increased its tech-related service exports from $16 million in 2002 to $360 million in 2010. But other African countries including Nigeria and Rwanda have burgeoning startup scenes, even Tanzania is popping up with two new tech hubs. Africans are buying mobile devices and services in droves, and as we noted earlier, Africa is leading in mobile money use.
But all this promise could be stifled if a group of European telecoms succeed in fundamentally changing how Internet costs are distributed.
At the upcoming World Conference on International Telecommunications (WICT) in Dubai this December 3-14, governments from all over the globe will work on updating the global policies that govern the Internet—policies that haven’t been revised since 1988. (Wow.)
As part of dusting off these regs, ETNO, an association of European carriers that includes Deutsche Telekom, Telecom Italia, U.K.-based Vodafone, and Spain’s Telefonica, are pushing a new rule, the so-called “sending party network pays.” It would force content providers to pay fees in proportion to the amount of bandwidth their content uses.
ETNO says it is simply trying to create a “sustainable model for the Internet.” Essentially, the telecoms are looking to pass on the cost of providing bandwidth for heavy use services, such as video streaming and multimedia—and it’s pretty clear that they are aiming at big U.S.-based players such as Google, Netflix, iTunes, and Facebook.
But many analysts and U.S. policy makers say these costs would ultimately be passed onto users, raising connection prices and making Internet access akin to making a high cost international telephone call.
The ETNO rule change will not just put the squeeze on users in Europe and the U.S.—it could kill the advance of innovation and digital inclusion in the developing world. Raised costs would disproportionately affect users with lower incomes, and new Internet ventures would be faced with a success penalty: a sudden jump in Internet traffic would come with a jump in costs. This would be daunting enough for a Silicon Valley start up—just imagine what it would mean for one in the Silicon Savannah.
In September, think tank leader Rohan Samarajiva urged African leaders to stand against the proposal at a WICT prep meeting in Ghana:
“The door would be opened for the creation of top-down, inflexible international regulatory regime for the Internet, much in conflict with the current framework that has enabled growth in access, innovation, entrepreneurship, and economic activity,” he said.
Samarajiva is one of many voices raised against this questionable proposal. In fact, it’s hard to find anyone outside of the European telecoms who are for it. Is it likely that these carriers are only shooting themselves in the foot? Well, if this regulation succeeds and stops the nascent tech revolution in Africa by raising costs, the carriers will lose millions of potential customers on the continent and in developing countries worldwide.
If ETNO’s regulation stifles innovation as well, the Internet will slowly lose value. Because without video and other features that push bandwidth limits, online development will stagnate. And the only free Internet content left will be photographs of cute kittens.