Alternative Paths to Internet Infrastructure: The Case of Haiti

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4. Issues and controversies
4.1. Internet telephony

The government-owned telephone company has a monopoly on the lucrative international telephone services. However, other companies can carry international Internet traffic, and can form virtual private networks by connecting a private local area network (LAN) or private branch exchange (PBX) in Haiti with a LAN or PBX in another country. Of course, the international carrier has no way of knowing when its customers are using this service to support voice communications that might otherwise have taken the form of a long distance phone call. This issue has been so problematic in Haiti that allegations of this practice led to a severe reduction of phone lines available to two of the ISPs (ACN and Companet).

This issue is common to many developing countries, although it is particularly severe in Haiti. Reasons include the heavy dependence on revenue from the telephone monopoly, the potential impending privatization, and the extremely high prices for international telephone calls. Regardless of the Internet, Haiti will eventually have to decrease the price of international calls, and probably increase domestic rates to balance revenues. Such a move will probably be driven by call-back services, which allow calls out of Haiti to be charged as if they were calls into Haiti. International regulatory pressure is also mounting.

Ironically, Haiti's attempt to protect the telephone company has probably harmed it in the long term. In many countries, Internet growth increases revenues for the telephone company. Calls to ISPs can be extremely long, leading to significant revenues in countries where there is a per-minute charge for local calls. This is especially true in countries like Haiti where long downloads of information from abroad are common. In addition, frequent Internet users often request additional phone lines. If Teleco were allowed to charge more for installing extra phone lines, it could raise significant revenues to expand and improve its infrastructure. However, the existing policy of rationing phone lines to Internet users has further encouraged the best customers for long calls and additional phone lines to bypass the phone company. This could be extremely costly when the inevitable rate changes do occur.

4.2. Spectrum management

Because of the lack of telephone lines, three of the four commercial ISPs rely primarily on wireless technology to reach their customers. Consequently, wireless communications are essential for Internet growth in Haiti. So how should access to the spectrum be regulated? At the moment, no license is required for access, and wireless devices can be placed anywhere, but ISPs are required to pay significant fees back to the regulator. The rights and obligations of these unlicensed users are not entirely clear. The policy has already led to controversy, with allegations that some unlicensed wireless connections interfere with a licensed microwave link. There have been demands that these Internet connections cease operations. Whether the allegations are true or not, this controversy demonstrates the value of clear spectrum management policies to promote Internet growth.

There are many options available to manage such a band [1]. The traditional approach is to require licenses for all transmitters. Applicants for a license specify enough information about intended use that a regulator can prevent excessive interference with any current license-holder. Haiti's current unlicensed approach has the advantage that the regulator does not add unnecessary delay to the process of Internet expansion. It also makes it possible for ISPs to offer dedicated links to mobile devices, as there is no need for permission from the regulator when a transmitter is moved from one site to another. There are also disadvantages to unlicensed. One is that there is nothing to prevent many businesses from deploying these transmitters in the same location, so there is always risk of congestion. Luckily, in a country like Haiti, this is considerably less likely than it would be in an American city. (Haitian ISPs have made good use of this advantage.) Another problem is that, since spectrum is shared, devices have little incentive to conserve spectrum. This may lead to devices transmitting at excessive powers, or transmitting constantly. Some may even set up transmitters whose sole purpose is to interfere with the transmissions of their competitors. If an unlicensed approach is selected, explicit rules of coexistence can reduce many of these problems [2,3].

4.3. International gateways

Two of the current ISPs can operate international gateways, and the other two cannot, despite applications to the regulator. In many developing countries, there is only one international gateway. The advantage of having more is apparent in Haiti. One ISP voluntarily chooses to provide communications services for some of its ISP competitors. If it refused to do so, customers might be lost to the other facilities-based ISP. The fact that the ISPs have different market niches makes the arrangement more attractive to potential facilities-based competitors. The additional competitors are also good for Haiti, particularly when one of those competitors has targeted customers that might otherwise have been missed.
Although this can benefit the facilities-based provider, it is often to the provider's advantage to take customers from the resellers when it can. This will inevitably lead to some tension. Disputes may address prices, quality of service, access to equipment, access to IP addresses, or other limited resources. Issues have already arisen, and some believe that the regulator should intervene. These are difficult matters to regulate effectively. This tension will probably continue until more companies gain the right to operate an international gateway (even if they choose not to exercise that right).

4.4. The government as provider

The National Bank's decision to provide Internet services exemplifies another dilemma that is common in developing countries. The Bank recognizes the need for such a network to strengthen the financial sector, and no commercial ISP has access to the necessary capital. A government can even tap international donor organizations. However, the move may threaten the commercial ISPs by siphoning customers, perhaps with the help of implicit subsidies. Making the enterprise effective and efficient under government control will also be a challenge, as is demonstrated by the experience with the government-owned telephone company. Perhaps this Internet infrastructure will also be privatized some day. It is too early to draw conclusions from Haitian experience in this area.

5. Conclusions

The Haitian experience clearly demonstrates that the Internet can grow even in the least developed countries, when regulators grant commercial ISPs permission to operate and access to critical resources. Four commercial ISPs have emerged, each capitalizing on its own unique experience, resources, and objectives.
More importantly, Haiti has shown that there are many paths to Internet development, and that every country must find the path that best matches its resources and objectives. The Internet began in the Untied States, at a time when telephone lines were in roughly 95% of all homes, the lines were dependable and relatively free of noise, and prices were low with respect to income. Thus, commercial ISPs in the United States relied primarily on dial-up service, and ISPs in many developing countries have emulated this approach. Haiti did not, and with good reason. Haiti has no such telephone system. Resourceful Haitian ISPs have instead adopted wireless technologies as a critical part of Internet infrastructure, even though these wireless devices were clearly designed for other purposes. The ISPs are consuming a resource that is more plentiful in Haiti than in counties like the United States: unused spectrum. They have also demonstrated that low-speed store-and-forward communications and telecenters have particular value in the Haitian context.

The importance of wireless technology to Internet growth makes spectrum management particularly important. Like all developing countries, Haitians have the opportunity to develop spectrum policies that are appropriate to their unique situation, like a greater availability of spectrum. Their current use of unlicensed spectrum demonstrates its vast potential, as well as challenges to overcome if clear and effective coexistence rules are not established.

Like many developing countries, artificially high prices for international telephone service create particular difficulties for Internet growth, as Internet telephony threatens this revenue stream. The growth of wireless alternatives complicates this issue. The artificial prices encourage heavy users to bypass the telephone system; when international telephone rates are reduced, as they inevitably will be, telephone carriers cannot share to the same degree in the increased revenues from Internet expansion. Thus, the presence of wireless Internet access provides additional incentive for regulators to rebalance these rates.

Many developing countries allow only a single entity to operate an international gateway carrying commercial Internet traffic. Some point to economies of scale to justify this arrangement. Haiti has demonstrated the value of having two such gateways, and allowing resale. As a result, four ISPs have emerged that collectively cover a broader range of customers. Still, the resale arrangements are not entirely without tension, because some ISPs offer both wholesale services to resellers and retail services to Internet customers, which always complicates matters. It is possible that easing licensing restrictions on international gateways further will reduce or eliminate these tensions.


References
J. M. Peha, "Spectrum Management Policy Options," IEEE Communications Surveys, Fourth Quarter 1998.
D. P. Satapathy and J. M. Peha, "Spectrum Sharing Without Licensing: Opportunities and Dangers," Interconnection and the Internet: Selected Papers From the 1996 Telecommunications Policy Research Conference, Mahwah, NJ: Lawrence Erlbaum Associates, pp. 49-75.
D. P. Satapathy and J. M. Peha, "Etiquette Modifications for Unlicensed Spectrum: Approach and Impact," Proc. IEEE Vehicular Technology Conference, May 1998, pp. 272-276.

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