Home Latin America III 2001 Digital Convergence, Regulation and Sustainable Development: The Role of the Inter-American Development Bank

Digital Convergence, Regulation and Sustainable Development: The Role of the Inter-American Development Bank

by david.nunes
Danilo PiaggesiIssue:Latin America III 2001
Article no.:3
Topic:Digital Convergence, Regulation and Sustainable Development: The Role of the Inter-American Development Bank
Author:Danilo Piaggesi
Title:Chief, Information Technology for Development Division
Organisation:Inter-American Development Bank
PDF size:24KB

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Article abstract

Digital convergence trends reinforce the efforts of countries in Latin America and the Caribbean to translate their political will into actions that expand their knowledge economy-an essential foundation for the process of sustainable economic development. Since digitalisation, the capacity to carry audio, image and data signals over the same line has blurred the distinction among various media. Countries and development institutions, such as the Inter-American Development Bank, are challenged to address the deployment of these technologies in a comprehensive manner.

Full Article

The expansion of knowledge-based economy enables a country to create wealth by adding value to local resources, produce this wealth in a more sustainable manner and distribute it more equitably. Access to information to build and apply knowledge is essential to marketplace operations, lifelong learning and dynamic relations between citizens and the public representatives. As a common denominator in these efforts, expansion of the knowledge economy strengthens the capacity of the countries of Latin America and the Caribbean to achieve these objectives simultaneously. Political will of Latin American and Caribbean countries to expand a knowledge economy Leaders of the Latin American and Caribbean countries recognise that domestic prosperity and global competitiveness during the twenty-first century depend in large measure on how well they deploy ICT in order to achieve development objectives. This recognition has been expressed by leaders during several high-level meetings as follows. 1) High Level Segment on ‘Development and International Cooperation in the 21st Century: the Role of Information Technology in the Knowledge-based Global Economy’, United Nations Economic and Social Council (ECOSOC) (June 2000, New York). The regional preparatory meeting of Latin American and Caribbean countries for the special segment took place during June 2000 in Florianópolis, Brazil. The Florianópolis Declaration “expressed the shared aspirations of the Latin American and Caribbean countries to become full-fledged members of the information society by the year 2005, on an efficient, effective and sustainable basis, and within the framework of the global knowledge-based economy.” 2) Meeting of the Presidents of South American Countries (August 31 and September 1, 2000, Brazil). In the final declaration from the meeting of Presidents of South American Countries in Brazil, the section on Information, Knowledge and Technology referred to the Group of Eight 2000 Okinawa Communiqué and expressed the “firm interest of the South American countries to interact with the Group of Eight members, particularly in the context of the issues related to the field of information technology.” The presidents welcomed an announcement by the Brazilian government calling for the creation of a “South American Fund to stimulate scientific and technological co-operation activities in the region, in the context of South America’s integration into the information and knowledge-based society.” 3) Intergovernmental Meeting on ‘Information and Communication Technology for Development: Perspectives of Developing Country’ (June 2001, Brazil). Representatives of 35 developing countries in Africa and the Middle East, Asia and Oceania, and Latin America and the Caribbean gathered in Brazil in order to build consensus with respect to the report of the Group of Eight Digital Opportunity Task Force (DOT Force) and the organisation UN Information and Communication Technologies Task Force (ICT Task Force), which would begin operations during September 2001. The Rio de Janeiro Declaration on ICT for Development stated: “it is of crucial importance that developing countries effectively participate in international decision-making process concerning information and communications technologies”. One of the factors motivating this comprehensive approach by countries in the region is their growing experience of digitalisation and convergence. Trends in Digital Convergence Digital convergence reinforces the efforts of countries to expand the knowledge economy. Digital convergence is occurring simultaneously 1) between voice and data communication in telecommunications, 2) between telecommunications and broadcasting, and 3) between telecommunications and consumer electronics. Convergence of voice and data communication. The worldwide volume of traffic on data networks now exceeds the voice traffic that travels over the Public Switched Telephone Networks (PSTN). To accommodate growing data traffic, major telecommunications carriers are building Internet Protocol (IP)-based networks in addition to the existing PSTN. The IP-based networks are based on packet switching technology designed for data communication, whereas PSTN are based on the circuit-switching technology designed for real-time voice communication. IP telephony, which is interactive voice communications via IP-based networks, is recognised as the important tool for providing inexpensive voice communication services. This was originally possible only through computers connected to the Internet. However, in countries where network interconnections of both ends of leased circuits with public switched networks were liberalised, commercial IP telephony services got started and have great potential to expand. A key benefit of IP telephony is the low cost of long-distance and international phone calls. The problems of IP telephony, such as bad sound quality, transmission delays and intermittent disconnection, have been nearly solved by advances in technology. The value of IP telephony is increased, particularly for people in developing countries, by advanced services that integrate voice and data, such as converged World Wide Web and voice services. Convergence of telecommunications and broadcasting Advances in ICT are gradually reducing technological barriers between telecommunications and broadcasting. The common use of telecommunications and broadcasting networks and the emergence of services exploit the middle ground between telecommunications and broadcasting. Digitalisation of broadcasting is destined to accelerate this trend. This convergence has three aspects: network convergence, service convergence and terminal convergence. Network convergence stimulates the info-communications market by making it possible for telecommunications companies and broadcasters to enter each other’s markets within the context of shared network use. Typical examples include the use of cable TV networks for the provision of telecommunications services and the use of communications satellites for broadcasting purposes. Service convergence includes ‘Internet broadcasting’. In many countries, the ‘one-way communication of information to the public (i.e. to unspecified individuals)’, typified by terrestrial or cable TV, has been treated as ‘broadcasting’ and all other types of telecommunication have been categorised as ‘telecommunications’. Terminal convergence includes multimedia PCs and TV receivers equipped with communications functions. Convergence of telecommunications and consumer electronics Advances in digital technology make it easy to connect equipment, including consumer electronics products, to the telecommunications networks. This trend is sometimes referred to as the Ubiquitous Network. This means all sorts of equipment can be connected to the network and access it anywhere at any time. This convergence first appeared in the area of security. By connecting a small camera to the Internet, people can easily watch their home from the office. This is much less expensive than traditional surveillance systems. In Japan, monitoring systems for elderly persons who live alone have been updated; they can even monitor their electric hot water jars through the Internet. If the amount of the hot water doesn’t change within a given time period, the jar will alert the security service. Cars will operate differently. If car sensors for temperature, speed, and windshield wipers, as well as the Global Positioning System (GPS), were connected to the Internet, it would be possible to collect much information about the world’s weather and traffic congestion without using special surveillance systems. Telecommunications equipment is changing too. Since each cellular phone has its owner’s ID and its location can be determined, new services have been launched. Such services as finding missing persons and stolen cars go beyond traditional telecommunications services. The Impact of Digital Convergence on Regulation Digital convergence presents a fundamental challenge to traditional approaches to regulation, not to regulation per se. Advances in technology do not replace regulation. However, they do challenge regulators to rethink how they carry out their functions in a new context. Convergence of voice and data communications The International Telecommunication Union (ITU) convened the third World Telecommunication Policy Forum (WTPF) in Geneva, from 7 to 9 March 2001, in order to discuss and exchange views on IP telephony. The ITU documents point out that “IP telephony poses a dilemma for developing countries: on the one hand it offers cheaper prices and lower costs, but it may also undermine the pricing structure of the incumbent telecommunications operator. The regulatory approach to IP telephony varies significantly among ITU Member States and reflects the difference interests involved.” More policy co-ordination about IP telephony among the Latin American and Caribbean countries is needed. The ITU documents from the WTPF describe this situation as follows; “In Belize, Cuba, Nicaragua, voice services are prohibited over both the public Internet and IP-based networks. On the other hand, in Argentina, Costa Rica, Guatemala and Guyana, there are no specific prohibitions for voice over the public Internet or over IP-based networks. In Peru, licensees (national, international and long-distance service providers) can use any technology, but for value-added service providers, real-time voice over IP is prohibited. In Ecuador, telephony over Internet is not prohibited in applications through end-user software and/or end-user terminals.” Convergence of telecommunications and broadcasting There is an increasing need to harmonise the policies and regulations that relate to the convergence of telecommunications and broadcasting. In the case of network convergence, considerations such as the conditions necessary for fair and open competition, and the separation in broadcasting between ‘program-supplying broadcasters (without having facilities)’ and ‘facility-supplying broadcasters (without supplying programs)’ need to be examined. In the case of service convergence, questions relating to the protection of ‘secrecy of communications’ and rules based on communality (i.e. neutrality, freedom of speech) must necessarily be approached in ways quite different from the ways in which they have traditionally been approached for ‘telecommunications’ and ‘broadcasting’ purposes. The traditional rules are difficult to apply to converged services, such as ‘Internet broadcasting.’ In the case of terminal convergence, standardisation and mutual recognition of each country’s equipment certification for telecommunications goods and services are increasingly important to encourage trade and price reduction. Convergence of telecommunications and consumer electronics Rules that relate to connecting equipment or private networks to public tele-communications networks should be improved to encourage easy introduction of new services. Enhancement of policies and mechanisms for the protection of personal information increases in importance as the flow of personal information grows. Harnessing the Development Power of Digital Convergence In Latin America and the Caribbean, like other regions of the world, regulators play a crucial role in determining if the fair, open and competitive conditions will be created that will allow digital convergence to achieve development objectives. The options for regulators are clear: either engage themselves to develop an understanding of the implications of digital convergence, to learn when and how to regulate, or become irrelevant and let the technology evolve in less than equitable and efficient ways. The challenge to regulators is as real and important as the potential contribution of digital convergence to achieving development objectives. Digital convergence enables people to receive better and more inexpensive telecommunications services. IP telephony can help people to communicate with each other in a less expensive manner. People can easily connect low-cost terminals to the public telecommunications network or even build their private community network economically. In rural areas, where the telecommunications service providers may not want to provide Internet services, people in the community could build their own wireless LAN network not only to connect buildings but to connect to the public Internet as well. Human development is one of the most important elements in this development. Inexpensive distance learning systems can be made available through ICT, such as the Internet and satellite communications, and co-operation promoted among countries to producing and exchanging teaching materials. Digital museums could be built that provide general access to digital information about the cultural assets held in local cultural facilities. Digital museums could be designed to support the public dissemination and preservation of local tangible and intangible cultural assets and historical legacies. Digital convergence can promote ‘digital democracy’ by providing simple mechanisms, and encouragement, for people to debate their opinions. People could participate in the policy formulation process of their government through telecommunications networks. Digital convergence can also create new markets where all kinds of enterprises could expand their businesses. Role of the IDB Countries in the Latin America and the Caribbean have already begun to use ICT to achieve economic growth, build human capital and strengthen democracy. The Inter-American Development Bank (IDB) is assisting countries in translating their political will into concrete projects that expand conditions for ensuring that more and more people are able to participate in and benefit from deployment of ICT and the potential of digital convergence. In order to contribute to doubling the economic growth rate, expand lifelong learning to the knowledge economy and build trust between citizens and their public representatives, the IDB Information Technology for Development Division has been evolving, in systematic and sequential interaction with countries, in the following areas: 1) ICT for development capacity building programs: – Formulating national ICT for development strategy; – Establishing legislative, legal and regulatory framework for ICT for development; – Training public officials in ICT for development; – Gender and knowledge economy; – Building cyber communities; – Geo-spatial applications. 2) Design of integrated ICT for development projects: – New economy (electronic commerce, integration, small and medium/sized enterprises, telecentres and rural renaissance); – Human capital (educational reform and connectivity, labour force adjustment to the knowledge economy and increase in information sector workers, educational reform and connectivity, youth and the labour force of the 21st century); – Digital democracy (e-elections, e-government, e-services). Digital convergence requires harmonisation of public policy and regulatory framework in Latin American and Caribbean countries. Strengthening telecommunication regulation in the knowledge economy is an important part of the above-mentioned building of ICT capability for development. In order to ensure that expeditious and effective growth of the knowledge economy contributes to efficient, equitable and sustainable development, the IDB supports strengthening the capacity of governments to work with the private sector and civil society organisations (NGOs) to identify issues, formulate policies and design an appropriate regulatory framework for digital convergence. Conclusion IDB’s efforts reflect the comprehensive approach to ICT for development that digital convergence is catalysing in the Latin American and Caribbean countries. IDB’s support of these efforts is crucial if ICT is to realise its potential to contribute to overcoming poverty and socio-economic inequality through sustainable economic growth. The author wishes to acknowledge the contribution of Hiroyuki Tanaka, specialist in telecommunications regul-ation, Information Technology for Development Division, IDB, in the preparation of this article.

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