|Widespread Access to ICTs: Policies for an Inclusive Information Society
|Global Information & Communication Technology Specialist
ICTs play a crucial role in improving the standard of living in developing regions throughout the world. A big problem is to overcome the differences in availability between rural, sparsely populated, regions and urban areas. Privately run community telecenters, with payphones, computers, fax, and Internet access, if well planned and supported by government regulations can profitably bring vital services to rural areas. The World Bank, with local governments worldwide, has helped set-up and finance many pilot projects and ongoing operations.
Reaching the Millennium Development Goals (MDGs) through ICTs for development and access for all are two of the key themes of the upcoming World Summit on the Information Society (WSIS). Indeed, nobody doubts today that access to, and effective use of ICTs play a crucial role in improving the standards of living worldwide. However, while there are obvious differences in the level of access to ICTs between nations, it is the disparities within countries, notably between urban and rural areas, that stand out in many developing countries as simply dramatic. For example, the density of telephone lines in the rural areas of developing countries can be up to 100 times lower than in urban areas, meaning that rural inhabitants are up to 100 times less likely than their urban counterparts to have access to a telephone. Access to more advanced ICTs, such as the Internet, shows even starker contrasts. While the explosion of cellular has gone a long way towards reducing this difference, large gaps remain. Equally remarkable are the differences in degree of access and effective use of ICTs in provision of social services, for instance in government, healthcare and education. While government offices, larger schools and main hospitals in the capital cities of developing countries tend to have telephones, sometimes computers and in a few cases even Internet access, most rural clinics lack even a simple two-way radio for emergency services, and it is very rare there are cases of rural schools and government offices with even a telephone. Income differential explains only part of this urban-rural gap. The rest of the gap is largely due to ineffective supply and a perception that rural communities cannot afford to pay for these services. However, it can be shown that rural communities, when given the choice, spend approximately the same proportion of their income as their urban counterparts. Policy makers face a challenge in devising schemes that will allow their countries to meet the Millennium Development Goals and build an inclusive Information Society. A combination of approaches is needed. On one hand, supply constraints need to be overcome, through policies that allow a market economy to develop and create a marketplace for ICTs. This, called bridging the market efficiency gap, can be addressed without public financial aid, through sound policies in which markets are liberalized, operators enjoy a stable regulatory environment and local entrepreneurs are free to invest and obtain a return from the provision of public services. On the other hand, in order to address the income inequality, usually compounded by the higher cost of providing service in rural and sparsely populated areas than in urban centers, innovative policies that stress community access rather than private access, may be used. Even in the most efficient of markets, without pro-active policies, there may still be areas or groups that cannot be reached commercially. In this context, innovative policies and financial support, provided through well-targeted competitive subsidies, within a clear and transparent output-based aid (OBA) framework can leverage substantial incremental investment to achieve both positive social returns and commercial viability. Community access Payphones, whatever the technology (wireline, cellular, satellite), are the paramount example of community access to ICTs and the most traditional form of access extension. Payphones can reach large segments of the population who do not have private telephone service, as well as generate sufficient revenues for operators. Rural payphones can be profitable since they are often the first telephone to arrive in a community until private telephones are installed. Unfortunately, the higher-income countries typically have achieved higher payphone penetration than lower income countries. Payphone liberalization – licensing of special payphone operators – has been one greatly successful way of accelerating this form of access deployment. Phone shops and Public Call Offices, sometimes with Internet access, are also quite popular forms of community access to ICTs, with many different versions sprouting around the world, from the Senegalese “teleboutiques” to the Bangladeshi “mobile payphones”. In all these cases, individual private operators see business opportunities in public services and the regulatory regime allows local reselling to take place. Their generally successful financial performance shows that people, irrespective of their economic level, are willing to spend on ICT services for personal or business purposes. Telecenters, with varying degree of sophistication, from the small-scale upgraded phone-shops and cyber cafés to the full-fledged Multi-Purpose Community Telecenters (MCTs), are the ultimate model of provision of community access. They are typically equipped with any combination of telecommunications services, such as telephony, fax, e-mail and Internet; office equipment, such as computers, modems, CD-ROM, printers and photocopiers; media services, including radio, TV, audio and video devices and multi-media hardware and software; meeting space for local business or community use, training or special purposes. The concept of telecenters emerged as a transitory mechanism to promote access to ICTs in regions where rural isolation, lack of purchasing power or low quality telecommunications facilities hindered participation in the economy. Interest in telecenters in developing countries now seems to have gained momentum and in addition to stand-alone telecenters, school-based or community-managed MCTs are emerging worldwide. However, the results have been mixed. Few telecenters perform well from a business perspective. Financial sustainability in most cases seems to hinge on management of the telecenter, a focus upon immediate commercial viability, and upon the still high demand for voice services. Unfortunately, in countries where this service is still in the hands of a monopoly, the chances of success of any telecenter initiative is limited. Policy options to extend access beyond the market Policies that promote open competitive environments in the telecommunications sector can go a long way in achieving universal coverage. The fast spread of cellular services is a witness to this fact. The market, though, has limits that policy makers can help overcome through the appropriate mechanisms. Where there is a legal monopoly, the best approach is a planned liberalization strategy that allows resale and private retailing of access through payphones, phone shops and telecentres, and the liberalization of value-added services including Internet access and private networks. In a competitive or liberalizing environment, policy-makers can also resort to innovative OBA schemes designed at leveraging investments to uneconomic areas with the incentive of competitive subsidies linked to performance. These schemes, typically implemented through universal service funds, have been successfully used throughout Latin America and in other parts of the world. They are usually transitory mechanisms to finance network expansion and service provision in challenging and unprofitable areas. While their initial focus was on community access to basic telephone services, they are increasingly used to promote Information Society inclusion through telecenters and ICTs for health, education and government. OBA subsidies are given operators in a competitive bidding in carefully selected target areas; they effectively reduce the costs of market entry. New entrants and sometimes existing operators compete for these subsidies which are awarded to the operator requiring the lowest subsidy and / or committing to the highest service rollout. In rare cases, the fund is financed from government budget allocations. A more common approach is to allow the ICT sector self-finance its own network expansion through small, mandatory contributions by operators and/or through licensing and spectrum usage fees. World Bank Group experience to-date Following the successes obtained in Chile and Peru, the World Bank is increasingly investing in replicating these models around the world. An early example was Guatemala, where the Bank supported the creation of the fund by law, development of fund guidelines and regulations and support to the first round of bidding. A similar approach is included in numerous other World Bank projects, such as in the Dominican Republic, Bolivia, Uganda, Nicaragua and Nepal. In most of these, support is provided not only for technical assistance, but also as investments in the actual rollout of the infrastructure. The World Bank Group also invests through the IFC, its private branch, in such ICT ventures as cellular operations. For example, IFC has invested in rural cellular service through Grameen Phone, the largest cellular phone operator in Bangladesh, to expand its franchise network of community telephones to 30,000 villages in rural Bangladesh. Finally, the World Bank, through the use of grant instruments, most notably infoDev and PPIAF, is supporting smaller scale pilot projects, which can later be replicated at a larger scale through the use of Bank and/or IFC instruments. For instance, infoDev projects such as a field trial in Kenya, a network of information kiosks in Ghana, and telecenters in El Salvador, among others, have tested new technologies that may prove more effective in the rural areas of developing countries. Also, a number of PPIAF grants are exploring the use of the OBA approach in markets and environments where this model has not yet been tried. Conclusion These are just a few examples of how international organizations can promote the widespread use of ICTs as an essential tool for development and in the fight against poverty. Armed with the right set of policies, developing countries can realize their Millennium Development Goals and promote inclusion in the Information Society.