The following are the outputs of the real-time captioning taken during the Tenth Annual Meeting of the Internet Governance Forum (IGF) in João Pessoa, Brazil, from 10 to 13 November 2015. Although it is largely accurate, in some cases it may be incomplete or inaccurate due to inaudible passages or transcription errors. It is posted as an aid to understanding the proceedings at the event, but should not be treated as an authoritative record.
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>> MOHIT SARASWAT: Good afternoon. So we are just waiting for another five minutes so people can join, and then probably we will start. Thank you for your patience.
I would request the audience to probably come and join us here, so we can have a better discussion. Just feel free to join the chairs on the two sides.
>> MOHIT SARASWAT: A very good afternoon, everyone. I know this is the last day of IGF and probably a post-lunch session, but this is a very interesting topic and is at the core of the whole IGF itself. The topic is about Internet Governance. Internet economy divide. How to bridge the global Internet economy divide.
The cyberspace is dead, as was said in the opening remarks. Now cyber is flowing into automobiles and banking. So there is no separate cyberspace, but there is an Internet economy.
The Internet economies stands at around 4.2 billion. And if the Internet was a country, it would have been at the fifth number ahead of India and Germany. So it's an important topic. And we have a very good panel members, and I would like to thank you for being part of this discussion. And I'd like to involve you as much as possible, because it's your topic. It's your discussion, which is important.
How we have structured this whole session is into four parts, where we will start with a brief introduction of all the panel members. And they will talk about why they are passionate about this topic. Why is it important to them.
Then probably we will drill down and we will go into the broad layers of Internet. And where does the economy per se fall into. And what are the issues pertaining to that? And how probably they can be at this.
And then we will talk about the issue, why there is a digital divide. So when I talk about the $4.2 billion, the big chunk of it still comes from the G20 countries. When it comes to Middle East, only Saudi Arabia is part of it. When it comes to Africa, only South Africa is a part of it. So there is a big number of countries which have been left out and are not well represented when it comes to the chunk of money. So it's important that we will have this discussion. And we will talk about why is there a gap and what are the ways we can bridge those gaps?
In the last part of the session, we will talk about trust. We will talk about why it is important that there has to be an in-built trust into this platform. Because it has been known when the trust increases, the economy increases automatically. So probably I'll -- I mean, I'll start with Mike. Mike, the floor is yours.
>> MIKE BLANCHE: Thank you. My name is Mike Blanche. I work for Google in London. I work on building Google's network and infrastructure, and look after some of our relationships with other companies. I'm in both Europe and Africa.
And I think the fact that I work in both regions makes it possible for me to see the differences between what we see at the Internet economy in Europe and also what we see in Africa and some of the differences and challenges there. And both regions have challenges, but slightly different. In Europe it's about scaling and in Africa it is more about access. So I think this will be an interesting discussion.
>> MOHIT SARASWAT: Steve, the floor is yours.
>> STEVE SONG: My name is Steve Song. I work for the Network Startup Resource Center, which is based at the University of Oregon. It's an organization that has been building technical capacity for over 20 years in emerging markets around the world. So we often think of Internet infrastructure as static, but it has to be not only installed by people but maintained by people. So NSRC works to develop that technical capacity to extend the Internet sustainably into areas where it doesn't currently exist.
>> MOHIT SARASWAT: On my right is a very special person. He is a young entrepreneur from Europe. Thijl, the floor is yours.
>> THIJL KLERKX: My name is Thijl Klerkx. I'm from Amsterdam and I'm 21. I feel older than a couple years ago. I'm working on my own start-up. And I work as a consultant to companies on technology and marketing. And I like this topic because I think I've been empowered by the Internet to start a business at a young age and I hope a lot of other youngsters canexperience the same no matter where they are in the world. So I hope we can make that possible for them as well.
Thanks.
>> BAHER ESMAT: Thank you. My name is Baher Esmat. I work for ICANN. That is the Internet Corporation for Assigned Names and Numbers. It's the global body that coordinates policies pertaining to the Domain Name System. I come from Egypt. And I'm based in Cairo. I'm part of a team at ICANN called the Global Stakeholder Engagement. So I'm managing relationships and stakeholder engagement efforts in the Middle East and North Africa. We work with all the stakeholders from Governments, business, Civil Society, academia, technical community.
And this topic is important because I've been involved in Internet related business for more than 20 years. I come from a Developing Country and I've been working in the Middle East and Africa for the past 20 years. So I kind of, you know, believe in the importance of the digital economy and how the Internet can impact individuals and make a difference, if they are able to embrace the different tools and resources and embrace the Internet at large in their daily lives.
Thanks.
>> MOHIT SARASWAT: Ana?
>> ANA KAKALASHVILI: Hello. My name is Ana. I'm here on behalf of ISOC as their Ambassador. Also, I am a lawyer in Georgia. I'm now with the German Ministry of Economy, in particular the German International Cooperation. So I work to help my other Government to -- in reforming, and in policies, focusing on IST communication in general, laws and policies.
Thanks.
>> MOHIT SARASWAT: Now we have a remote participation. It's very important to introduce Walid Al-Sagaf, who is joining us from Yemen/Sweden. So can we have the video, please.
(Video)
>> Hello, everyone. My name is Walid Al-Sagaf. I'm the Chair of the Yemen chapter of the Internet Society and I'm also a board member of the Internet Society itself. I'm terribly sorry for not being there in person. This workshop was basically my idea. I am -- I and Mohit came up with the workshop proposal and it went very well and eventually we got you. Thank you everyone for being here. I wish also to thank Mohit and Ana for their help. Without that, it would not have been possible. Obviously you can't remotely organize a workshop, I guess, not yet.
So I'd like to apologize for not being there in person and I want very briefly to say that this workshop is really for us to brainstorm on ideas, on ways to which we can collaboratively consider opportunities and ideas that would promote a betterunderstanding of the challenges that face Developing Countries in particular, but also that address the bridges, possible bridges, between Developed and Developing Countries when it comes to the Internet economy.
I've been involved in many projects in some Developing Countries, including my own, Yemen. And I've seen firsthand how difficult it is to get the economy going on a cyber dimension. It's really difficult, the infrastructure, the awareness, the training, the human and financial and material resources are very limited.
So obviously I can't say much more than this through this remote participation channel. But I'd like to say that whatever you're doing here will be extremely helpful for us to understand the challenges facing us in the future. And perhaps drive, drive the ideas that would help guide policymakers on a national and International levels.
It's a stakeholder approach and I'm really glad that there are several of you who have come from different backgrounds and different stakeholders. So I take this opportunity to thank you all and wish you a very successful workshop. Again, I apologize for not being there, but I'm very much looking forward to your discussion. And I'm hopefully participating remotely when the connection allows. And they will be looking at the very end results of this wonderful workshop.
Thank you, everyone. And enjoy the workshop. Bye-bye.
>> MOHIT SARASWAT: Thank you. Just to introduce myself, I'm Mohit Saraswat, I'm an Internet Society Ambassador and I come from the Internet Society UAE chapter. Welcome onboard, participants and audience. We would like to have a discussion on this particular topic, because this topic is very important for us. It's -- this topic is very important for the growth of the Internet itself. It's important to bring the next billion on the platform. So I would ask you to participate as much as possible whenever you feel you have a burning question with you, probably just give me a snap and I'll try to involve you as much as possible.
I would also request audiences at the back to probably join, feel free here as we move on to the next part of our discussion as we talk about layers of Internet.
So as it comes to layers, the Internet has been divided into certain layers from a logical perspective, to give it a better -- I mean, better governance structure, better management structure. So probably I'll ask Baher to give us a feedback about the layer and then also talk about what are the challenges faced on each layer, particularly emphasis on the economic and social layer.
>> BAHER ESMAT: Thank you, Mohit.
So engineers usually like layers, and they like to see the Internet and the Internet Protocols in layers and explain them in layers. And sometimes it's much easier for people to get a sense of how the Internet works if they look at the different layers. But we're not going to speak any technical or geeky sort of language here. We're going to simply say that if you look at the Internet today or even Internet governance, as the IGF, there are generally three layers. And this is not like a definition. This is one way of looking at, you know, Internet and Internet governance.
There is the infrastructure layer. This is the cables and the spectrum, the wireless network, the satellites and so forth.
And there is the logical layer. These are the addresses, IP addresses, Protocol parameters, domain names and so forth.
And then there is everything else. The third layer is simply everything else. We can call it economic layer, economic and society layer. We can call it everything else. The application services, security, privacy, laws, policies, and so forth.
And within each layer, there are multiple actors, multiple players, from like -- if you look at the physical or the infrastructural layer, you see regulators, those national bodies that set rules and Regulations in relation to access and infrastructure. At the global level, you have organizations like the ITU. You know, they do a lot of policy work in relation to spectrum, in relation to some of very physical or infrastructural standards and Protocols.
And if you look at the logical layer, organizations like ICANN, they do policies in relation to domain names, IETF,others. Some of those organizations are are standards organizations, like IEE, IETF, and W3C.
And then in the third layer you have everyone else. You have the businesses, the Civil Society, the policymakers, the academics, and each sort of stakeholder has their roles and responsibilities. They work together. And this is, you know, of course the good thing about Internet and Internet Governance, the collaboration among the various actors and the various stakeholders.
So this is in a nutshell what I wanted to share with you. And I'll turn it back to Mohit to talk about each layer in detail.
>> MOHIT SARASWAT: So I would like to give the floor to Mike. Probably we would like to hear from Mike what is it a private business's owners, like Google, has to share about this layer. Why is it important to them? What are the problem issues faced by this layer and what are the probable recommendations that the private businesses have to make to ensure that that layer particularly works very smoothly.
>> MIKE BLANCHE: Thank you. So by my experience and expertise is probably most in the lowest of those layers, around infrastructure, around how do we bring the Internet to more people. How do we reduce the cost of the Internet? And the Internet Society in 2012 produced a very interesting report about Internet development in Africa and how to help encourage Internet development in Africa. And they had three key recommendations which I think we would agree with. First is to remove roadblocks. Don't make it hard for people to build infrastructure to invest.
Promote investment. Make it easy for people to invest money in this new infrastructure, to enable more people to connect to the Internet.
And, thirdly, to lead at the highest levels of the Government in terms of promoting and leading by example in terms of how you develop your infrastructure.
Google ourselves, we're trying to do our part in the Internet infrastructure. We invest a lot of money in building our network, our end data centers, and bringing our content and services close to where users are. In the past three years, content providers have invested over $100 billion in Internet infrastructure, investing along with telecoms and operators who invest a lot of money in the submarine cable, delivery centers, and their networks. So we have networks in 33 countries, including in the global South. And we are also going beyond that to help try and improve the Internet infrastructure.
For example, we have project LINK, which is a project we started in Kampala, Uganda, to help connect the mobile base stations together.
We are doing project Loon, which is to put balloons high in the stratosphere above where planes fly, and put mobile base stations on the bottom, and provide Internet access. A couple years ago we announced partnership with three Telecom operators in Indonesia to trial this across Indonesia. And Indonesia is a challenging country to provide mobile phone coverage and Internet coverage, because it's 17,000 islands, big ones, small ones. Running cables is expensive for Telecom operators to cover all of those islands. And we think putting something 60,000 feet in the sky, we can help reduce those costs and help bring the Internet to more people.
So the infrastructure layer, that's -- I think that's the foundation for everything that we're talking about today. You can't build an Internet economy in you don't have the -- if you don't have the basic plumbing to make it happen.
On top of them, the logical layer, much of that is setting global standards. But we need to be aware when we're developing standards for Internet Protocols and names and numbers and things, that we take the global perspective into account and make sure that the standards we develop and the protocols we develop will work in all situations for all Internet users, not just for the lucky people who have a gigabit to their home in the west.
Finally, there is the economic and social layer. I think we will talk more about that later.
>> MOHIT SARASWAT: Thank you, Mike. So it's important that infrastructure has been given enough importance to kind of have the potential on the layer that sits above.
I'd like to bring in Ana now and would like to understand from her expertise how probably a legal and a multistakeholder approach is necessary to address the challenges which are on those layers.
>> ANA KAKALASHVILI: So I would divide this topic and how to tackle the Internet economic divide on two parts. First, as was said, infrastructural access, the technical and physical part. And another is trust. Not the security of the platform but more about Internet -- possible Internet users, how do they trust the technologies, and do they want to be connected to the Internet? So this is two sides that I would love to talk about more.
So if I -- if talking about infractural access, there are two things that Government has to provide, foster and encourage. First is the more economical part. This is more investment, so that they attract more foreign investment in the country, that they help with people who want to establish IXPs, for example.
The other part is legal. To make sure that there is no monopoly and this the market is competitive. As well as business doing is easy, in which Government -- in which the Georgian Government I can tell that business doing is easy. We are in the top 12 or 10 countries where business doing is easy because the Government, I think it was the Ministry of Justice who made -- makes it possible for you. And someone who wants to do the business, reduce -- your business to be registered as an entrepreneur or company in one day and you can do it with the website. And they are investing a lot in the platform where you can do this. It's secure and stable.
And then we go to the infrastructural and platform security stuff. So I don't want to talk about that.
Basically, business doing is very easy in Georgia and that should be essential in what we call gaps and issues.
So I think I'll get back to my points later on. Thanks.
>> MOHIT SARASWAT: Yes, you raised some important points. Like why the people who are not on the platform are not on the platform. A, there is an access issue, where they don't have affordable Internet or maybe they don't have the infrastructure itself, which I think Mike kind of touched base. Or, B, maybe they don't trust the platform enough to be part of that. And as a result, they're not on the platform, and we are missing that volume, which in turn affects the Internet economy.
So now I'd like to go to maybe Steve and understand your thoughts on the work what you have done in Africa, how it has helped the Internet economy.
>> STEVE SONG: So my comments will focus on subSaharan Africa and I just want to pick up on a comment that Vint Cerf made in an earlier session today. And that was that we all use the word "Internet," but it doesn't mean the same thing to each of us. For someone who is buying access to data in five or ten megabyte increments, their experience is different from someone who is sitting on the end of a gigabit fiber connection. And so there are distinctions to be made. I just want to make sure that my comments are couched in the context of the growth of the Internet in subSaharan Africa.
And I want to talk about infrastructure because it's underrepresented in the discussions at IGF. As the value of the Internet increases for all of us, you know, the disenfranchisement of those who don't have access only increases. And that is dependent on getting them some kind of physical infrastructure to connect to the Internet. And the miracle that has happened in subSaharan Africa has been the advent of mobile infrastructure, which began in 1994, and took about ten years to really sort of come into its own. But has taken I think -- in 1994, there were more telephone lines in New York City than in the whole of subSaharan Africa. So you get a sense of how profound the transformation has been. But as the representative of the ITU pointed out in the plenary session, that trend is slowing. So the trend of getting people online is not accelerating. It is slowing down to some degree.
Happily, there is another revolution that has happened, and that began in 2009 with the arrival of one of the first large undersea fiber optic cables coming down the East Coast of Africa. And now there are over 13 very high capacity undersea cables circling the continent, which has itself sparked a tsunami of investment in terrestrial infrastructure and fiber infrastructure faster than anyone would have imagined.
And why that's important is fiber infrastructure is a great leveler in terms of enabling all kinds of businesses. One of the weaknesses of the mobile industries, it had a tendency to create vertical markets. Once having access to spectrum, it required millions if not billions of dollars to invest in the backhaul, national backhaul, middle and last mile services. So the threshold to enter the market as someone who wanted to provide Internet access or any kind of telecommunication access was very, very high.
Now, with fiber optic networks reaching most primary and secondary cities in subSaharan Africa, it's a new game. This year alone I've seen over a dozen announcements of metropolitan WiFi networks in African countries. Many announcements of fiber to the home in wealthier suburbs. There are at least ten projects using dynamic spectrum, which is the reuse of television spectrum for rural broadband that are happening in a number of different countries. So suddenly we have gone from a technology that encouraged kind of vertical markets, to a technology now which really encourages competition. And if we want to enable the access economy, one of the key elements there then is ensuring that that fiber optic infrastructure is available on an open access basis.
Because where fiber optic infrastructure is controlled by a single operator or indeed by a Government with a vested interest in controlling that interest, then we don't see access thrive in those markets. And Mike mentioned briefly project LINK in Kampala. It's an interesting project, the Metro fiber project. What is interesting is that it has an open access network. It's broken down the distress among the existing operators there to really make access initiatives thrive in that region, bringing universities online, businesses online. It's an impressive example.
I'll stop there, but I'll talk more about infrastructure.
>> MOHIT SARASWAT: Thank you, Steve, for bringing this important point about infrastructure access to probably reduce barriers, to bring new stakeholders into the whole ecosystem, not only the consumer but the new carriers, maybe new universities, new academia. So it's important.
But let's move away from Africa to Europe. So I would like to understand from Thiljl, where infrastructure is not the issue, where problems are faced by the new entrepreneurs where you want to set up a new e- or m-Commerce business, what do you recommend as a solution to those problems?
>> THIJL KLERKX: It's a difficult question. There are a lot of difficulties. But if I look at my friends, for example,it's just inspiration. Because when you have access and you have great access, although I don't have fiber to the home inNetherlands, we are lagging behind a bit on that. But then the next step is that you actually need to use it to do something with it. And I think that when I told my friends yes, I'm going to start a business, I was like 14 years old, they were telling me like well, how are you going to do that? That's not possible. That's crazy. And also the authorities, for example, when I went to the Chamber of Commerce to register my business, I had to come back three times, bring my parents. And then even they didn't properly know the law. The law said you could do it but then they told me it wouldn't be possible. But I think that starts with having an example.
I had a couple examples in the Netherlands of guys who started at 14 or 15 with some ugly simple website, and five years later became millionaires from it. And that was sort of my trigger to say I want to do something like that. And I think that we should try to show those examples around the world, where it is possible no matter what your age is and no matter, you know, how good your access is. If you have the Internet, everyone can add something to the Internet, everyone can publish there. Everyone can sell their stuff there. And that's an easy and simple thing to do and it's become easier over the years.
But then, of course, if you look at like Developing Countries, we will probably need to make some changes. And I really hope that maybe also, for example, the open source projects building Web shops and software to do business online will also focus on those areas of the world that right now probably don't use our software and that might be using different languages. But also just in like taxes and payment systems and that stuff. So, of course, you need things to enable online business. But in the end, the first step is to show that it's possible for everyone. You don't need big investments. That's the is this first big thing of the Internet. When I found I could build my website with zero Euros, using a free website package, and then the add blockers to get away -- take away the free hosting ads, I mean it's all possible. You don't need money for it. You just need a lot of time to figure it all out and you need some interest in it.
>> MOHIT SARASWAT: Thank you for sharing your views on that. Your views are very important because your views are the views of youth. I hope it has been taken forward, and we will probably record and report this. There has been enough work which has been done on that part.
Before I move forward and probably a deep dive on the issue of the digital divide on economy per se, I would like to see if we have any questions from the audience. So I would really -- I mean, love to see if there's any questions from the audience available here or maybe remotely.
Yes.
>> AUDIENCE: Hi. I'm Gary Fowley. I represent the ITU at the UN. All due respect to youth, we wouldn't be here if it wasn't for you and the future that you'll bring to this.
I'll give you thoughts as an elder who has been following this issue. I don't think we can talk about the Internet economy in truly -- in a full way without realizing that some of the challenges of bridging the Internet economy starts in many ways because we have yet to sort of realize that the Internet is probably our first global, truly global utility. In the past, water, transportation and power, you go out to the border, you could turn off the power, turn off the water, stop the planes, trains and automobiles. But with the Internet, especially on the transport level, it doesn't work so easy and that kill switch is a fickle master, I guess.
And we know that the economic efficiencies and the utility is correlated to the speed at which the data packets travel on the Net. And as data becomes an increasingly important part of -- important input to all economic activity, the Internet economy becomes an increasingly important part of the GDP.
However, you can't maximize this utility by putting restrictions on the Internet and slowing down that utility. And nor can you give people the tools and communications, and expect they're not going to exercise their Article 19 right to express themselves.
And I think that is where the nexus of the problem lies. Because you have -- or that's where the economic utility reality hits the political reality. Because in many ways, the Internet can be a threat, seen as a threat to sovereignty. Yet we managed for, well, at the ITU, 150 years this year, to come up with solutions, scientific solutions, technical solutions. We seem to have gotten ourselves mired down on this one in some ways that, you know, I don't know what it's going to take.
This is my question now. I'd like to know, well, one, I think we need more research on the fact and awareness that this really is -- and I'm using "utility." You say "utility" to an American, they go regulation and taxes. But I mean in the economic sense.
How do we get people to realize that this isn't -- this Internet economy is based on a fundamental infrastructure that is now maybe potentially our first global shared infrastructure? What do we have to do, if you agree, to make sure people come to that reality?
And one last comment, it always strikes me or I would say Article 19 of the UN Declaration on the Rights and Freedom, says you have the right to express opinions across all media and frontiers. That was written in 1946. They were thinking of the radio at the time. Nothing then had seen the Internet. But that is a forward thinking concept of Freedom of Expression. But that's the first time that the Internet is testing that principle. That Article. And it presents a big challenges, but alsopresents a big opportunity for us to help the world realize that this is not just about them and their device, but something that is bigger than them and that they share.
Anyway, those are my comments and there was a question there, I think.
>> MOHIT SARASWAT: Do we have any other questions from the audience?
>> AUDIENCE: Good afternoon. I'm Lucas. I'm here from Brazil. And I'd like to know from the panelists regarding the case of African countries, how the African Union initiative of the 2016 Agenda can contribute to broaden the Internet infrastructure in the African countries.
Thank you. Agenda 2016. And the initiative related to the implementation of the SDGs. How can they contribute to broaden the infrastructure of the Internet in African countries.
Thank you.
>> MOHIT SARASWAT: You would like to take a stand on this? Do you have a viewpoint? Okay. Anybody want to take it. Okay.
>> MIKE BLANCHE: Gary, was it, from the ITU?
I think it's really interesting that you say the Internet is the first global utility. I think that the telephone network and similar was also kind of interconnected globally and perhaps could be considered a global utility as well.
>> AUDIENCE: (Off microphone).
>> MIKE BLANCHE: The kill switch worked better on the telephone. Maybe. What is different with the Internet is it's the first of these global networks that has been really built and managed in the bottom-up multistakeholder way that the Internet has. The telephone system, because it came from traditionally kind of monopoly kind of state owned companies in each country, that would -- so it developed in a very different way.
But then the similarities between the telephone network and the Internet are interesting. Because the businesses that started and grew over the telephone network, like the career services and the taxi services and so on, the people that communicate over the top of that, that was kind of permissionless. And people, subject to the local business rules and so on,could set up any sort of business and use the telephone network as a means of communication.
And the Internet is very much the same. And maintaining that permissionless innovation advantage, where anyone can start a business on the Internet and reach all the people on the Internet without having to seek approval from particular Telecomcompanies, or particular other companies, so that he could reach everyone on the Internet. That's a really important principle. And I know from my past experience having started businesses on the Internet, if I had to have gone out and sought permission from a whole bunch of different people to do what I wanted to do, it probably never would have happened.
So, personally, and as Google, we're big supporters of the open Internet.
>> MOHIT SARASWAT: Steve, would you like to answer the question on the access for the African Union?
>> STEVE SONG: Sure. I think that a key role for an institution like the African Union is in the kind of cross-border coordination and knowledge sharing across countries on the continent. Developing Internet infrastructure is, you know, is multilayered and complex from negotiating terms to land undersea cables, to the ownership of the landing station, to development of national backbone infrastructure, to the management of radio spectrum, to the enabling of last-mile technologies. All of these things place an incredible burden on countries that may not be well resourced in that respect. So facilitating the sharing of good practice across those countries is a critically important thing to do.
The other thing I think is, at another layer, is facilitating the regional economic integration across those countries. So the harmonization of roaming services across the region, perhaps not the whole continent, but in East Africa, Southern Africa, west African blocks, looking at integration there, the ability to use eCommerce services seamlessly across countries and it would stimulate cross-border trade, and making sure that the infrastructure crosses borders as well. Because many countries that are landlocked on the continent are hand strum in terms of being held at the mercy by the coastal countries who have access to undersea cables.
So making sure that there is a real mesh of fiber infrastructure that gives every country multiple options not just for redundancy, but also from a competition point of view. I think those are absolutely key things that the African Union can do.
>> MOHIT SARASWAT: Okay. Do we have any remote panel questions?
>> REMOTE MODERATOR: Mr. Moderator we don't have any remeet interventions at this point.
>> MOHIT SARASWAT: Okay.
>> AUDIENCE: I'm from Thailand. I'm a policy officer.
I have a slightly different problem than what you've been saying. Because Thailand is a middle income country, and we are -- we have, with 3G and 4G technology, we have pretty good Mobile Broadband coverage, maybe 80 percent already. But not everybody is using it, but we have it. So we're doing pretty good there.
But our real problem is that we are stuck in what they call a middle income trap. And like we are trying to use this -- embrace this Internet economy, so that we can jump across the poor gap to the rich gap, but nobody has figured out how to do it yet. I mean, that's why we are here, trying to learn about best practices and all of that.
I guess I don't have a question, it's just that I want to hear more about it. Yeah.
>> MOHIT SARASWAT: I think this is something which we are going to discuss at length in our other session, which we are having now, in another part of the whole session. We will be discussing about the -- if you believe the statistics, the statistics say if you keep all of the parameters the same, when it comes to Developed Countries in EU versus Developing Countries in African, like plantation rate and other things from an Internet perspective, but still there is a huge divide when it comes to the gap of GDP versus -- I mean, the 4.2 billion share which I just talked about from the Internet economy.
So we would like to explore the issue why there is this gap and what are the possible solutions to kind of bridge those gaps, in general. So we would like to hear the panelists' view on those. Like why there is a digital divide? Why is there an economy divide when other things remain the same, but still there is a digital divide? So are things not working on a regulatory or education level? Maybe on a legal level? What is it that is not working, which has not been addressed. So maybe Baher.
>> BAHER ESMAT: Thank you, Mohit.
So one of the recent studies that were done in this area is one that ICANN commissioned the Boston Consulting Group to do. That's a study on Internet economy, more specifically on barriers to Internet economy. And the study has looked into four components and analyzed each of those components quite deeply to identify the barriers.
And it -- the components are infrastructure, information -- and "information" here means content and services applications, and so forth. Industry. And by "industry" they looked into the regulatory frameworks and policy frameworks that allow, you know, businesses to establish themselves or investors to establish business. It looked into logistical issues in transferring goods or building roads and infrastructure and so forth. So this is the industry.
And then the fourth element was the individual. The skills. The level of education.
And the study actually examined 65 different economies that cover more than 80 percent of the world's population and more than 90 percent of the world economic activity. And they ranked each of the 65 economies, against each of the components, and then there is an entire sort of ranking.
The bottom line of this study is that elements related to infrastructure, online services, and ability to conduct business online, okay, together with the regulatory framework or the enabling environment, are crucial for any country to, you know, make progress towards a digital economy.
So if you look into the details of this, you will find that more work needs to be done in building and deploying, you know, network infrastructures like in Africa and other areas. This does not mean that, you know, nothing has happened in the past years. Apparently more infrastructure and more sort of even spectrum in the mobile is required to get more users online.
The same for the application services. One of the challenges we have in Developing Countries is for, you know, we keep talking about increasing Internet users. Like penetration of 60 percent, 70 percent, 80 percent, but I guess we also need to look into what those users actually do online. Are they merely consumers or do they also produce, you know, products? They produce services. They contribute to the GDP and so forth.
Issues that are not necessarily technology related, like education, like the literacy rates, like income rates, affordability for access, issues that affect the overall digital economy and that kind of thing.
So it's an entire ecosystem. And, again, there are multiple actors in this ecosystem who need to work together and to continue to work together to sort of, again, make progress.
Personally, I don't like the "digital divide" term. Personally, I don't like it. I know it's been there for 20 years. But the thing is, the gap will continue to exist, whether between countries or within countries. So the issue is not about the gap. The issue is how much progress we as communities do to move forward and to get more people not only to get them online,but to get them to, again, embrace the tools that can help them contribute to their societies and their economies.
Thanks.
>> MOHIT SARASWAT: I would like to bring in Ana, to understand how you -- I mean, what are the roles, a legal or regulatory framework or Civil Society has to do in order to bridge this gap? I mean, just to correct myself, when it comes to the digital divide.
>> ANA KAKALASHVILI: Yes, I've got the question. I mentioned earlier the trust issue. And by the "trust," I meant the feeling of the relevance to be connected to the Internet, the first thing.
And then Baher already talked -- when I am connected already to the Internet, then how can it trigger the economy, Internet economy? So that's two things.
But going back to the relevance, I talked already and I said so in order for bringing more people on the Internet, you need to show them that they have to be there, right? So many people in Georgia, and I talked to many of them living in rural areas, in regions far away from the capital town, they -- first, they don't understand. It's not in their language. Technology, Internet is not -- it's not understandable from the point of language, as well as they don't have any digital literacy. Even though it's -- for example, many of them know Russian. So you can actually get your phone on Russian language. But still they don't know how to use it.
So, basically, what the Government planned to do, but this project is very pending, they wanted to link the Internet to the region, together with ISPs, major ISPs that we have in Georgia, and together with that do the social part. In particular, educating people in regions on how to use computers, how to use Internet, and et cetera and et cetera. But still it's very pending. Still it's very unclear when it will be done.
There is another issue that I'd like to talk about, but maybe not in the frame of this workshop. But an issue of community. In Georgia, the community, and I guess in many countries or developed as well, the community is not integrated. They, for example, even if we talk about it, ISPs, Internet Service Providers, don't want to talk about it. The Government is not interested enough in this, they are not encouraging private Sector for developing infrastructure, and et cetera and et cetera. So the community has to take its stake as well. The community has to come together, talk about the issues, and et cetera and et cetera.
So basically, if you -- that's the issues. If you want me to talk about the solutions now, I can go.
>> MOHIT SARASWAT: Go ahead and recommend your solutions.
>> ANA KAKALASHVILI: Well, I think I said already what the Governments can do in order to make Internet more accessible: To encourage Internet users to business. I said first, from the legal point of view, is making it, in general, easy to do the business, as well as encourage foreign and local investors to bring money in building infrastructure. That's economical stuff.
If we go to the social topic, then I would say that collaboration and building trust between different actors is very important. And then I see that the International organizations, like ISOC or ICANN, they have to do this outreach in different countries, local communities, so that they bring stakeholders and actors together. That might help a little.
>> MOHIT SARASWAT: Steve, do you want to add something?
>> STEVE SONG: Yes, I would -- I'd just, you know, I would agree with the comment that it really is an ecosystem. Unfortunately, ecosystems don't have easy answers, in that they require multi-dimensional interventions. But I think in thinking of subSaharan Africa, one thing that would make a huge difference, I think, in terms of the Internet economy development is mobile payments. And we have seen the successful example in Empesa, Kenya, and it's the example that is cited. You may not know that Empesa has launched three times in South Africa. And I think the recent one they are hoping will be a success. But it's not straightforward. Because payment systems often bring into tension financial and telecommunicationsregulation and are stifled by a combination of factors. Sometimes it's difficult regulation. Sometimes a lack of investment. Sometimes a lack of sufficient sustained investment to help things take off. And then, of course, the lack of interoperability between mobile payment systems that end up limiting the spread of these services. So that if you have a payment service from one operator, you can't make a payment on somebody else's network. So this is a long way to go there. But once that is in place, then I think if we look at Kenya as an example, what we have seen is a flourishing of businesses that are based upon the ability to make payments through an end payment service. So that I think is a critical enabler. And also just that thing of the interoperability among those payment services across operators.
>> MOHIT SARASWAT: Thank you, Steve. I think there has been a pattern which is coming out with our discussion, also, that trust between the different stakeholders is very important. And we have been experiencing this of lately that there is an increased traction of data localization. So countries have been maybe probably wanting to have their data reside locally. They don't want the data to go out. They don't want the infrastructure to go out. There has been enough resistance, again thecloud services which were hosted out of geography.
So I would like to probably know from the panel their view on -- is this data flow restriction helping the economy in any way? Because the Internet per se is not transnational -- I mean, it is transnational.
>> MIKE BLANCHE: Thank you. So I'll just finish off the previous section on gaps and barriers and then I'll go into the data localization and stuff.
So I'm from the UK, and the UK has the highest proportion of its GDP from the Internet economy. Something around 10 percent. The economy comes from the Internet economy, which is the highest in the world. Then in the list is South Korea, China, Japan and the US is only 5th, which is a bit surprising to me. But very interesting.
Some people may argue with BCGs methodology, but I think the UK has some interesting lessons for best practice for other countries as to how to help develop your economy in this Sector.
We talked about infrastructure, the UK was one of the first countries to liberalize its Telecom's infrastructure in the 1980s. On the industrial side, some key things you have to have in place in terms of the ICT skills and the economy, you have the right people and skills to build these businesses. Fundamentally, you have to have power, energy, infrastructure that is capable of supporting IT services. Good access to capital, so you can invest and build businesses and grow businesses as well. It's very important. And then there is a whole raft of laws and rules around things such as intellectual property, custom, regulations and keeping tariffs low. Extra taxes on mobile services, for example, which happen in some countries. Some countries have a tax on a simcard, which is not a great way of helping people to get online.
For individuals, things such as education, a good educational system is important. And Steve talked with having good payments and financial systems that enable access.
Another factor that is important that is hard to change is the content and in particular the content available in the local language. And the UK is very fortunate that English is kind of the global language of business. My language skills,unfortunately, are bad. But we have the benefits of that, and as a result you have organizations such as the BBC and Guardian and so on who built global digital media brands at least partly because of the language skills that are there.
So there's a range of different factors involved in this, and there is no one panacea solution. And someone in another session earlier this week talked about levers. And there are different levers. It's like on a jumbo jet, you have to move all the engines together to make it move forward. If you only move one, then the thing will skid off the runway and it's a disaster. So all of these things have to move together to move the whole economy forward.
And so the next question, I think we heard both from the audience and the panel that the Internet is a global network and the idea that you can keep the data within a country and that makes it -- doesn't make it more secure, because it's only in one place. And it makes it easier for someone to steal it. It doesn't make it more resilient because you are susceptible to problems. If your emails have to be stored in your country, what happens if you go abroad? You cannot access them. You can have it that way if you want. But that's not the way that people expect it to work. So data localization is a symptom of other issues around, as you say, trust, and so on, that we have to solve in the broader context rather than thinking that by containing data in one place will actually help the issue.
>> MOHIT SARASWAT: Steve, would you like too share your thoughts on this?
>> STEVE SONG: If you have --
>> MOHIT SARASWAT: What I want to know is there has been an increasing discussion on this. Data localization. Particularly in Africa, per se. They want the infrastructure to be built locally. The argument what has been given is it will help them flourish the local skill level, particularly when it comes to the ICT side. So it helps the economy locally. So do you really feel that it's helping Africa per se?
>> STEVE SONG: I think data localization certainly from the perspective of an African country can help a great deal, simply from the point of view of dealing with latency issues. We sort of -- you know, we think of the Internet as stateless. But really, you know, if your fastest response times tend to be in certain geolocations in the world, so getting high speed and responsive Internet is challenging. And simply bringing undersea cables to a country is often not enough, because if all the data is stored somewhere else, then there is a challenge to speeding up.
Now, there are lots of solutions to this, such as local caching, and so on. And content delivery networks. But at the same time, there is absolutely no reason not to have local Cloud infrastructure as well as International Cloud infrastructure. I think what we value about the Internet is its diversity and its resilience. And part of that resilience is in having diverse infrastructures spread out. Not just geographically spread out, but spread out across different institutions as well.
>> MOHIT SARASWAT: Thijk.
>> THIJL KLERKX: I would agree, Steve. It could add a lot when it comes to speed or resilience to have local datacenters and storage. But I think that at the same time that shouldn't be like enforced at this moment by the Government, because it would be more like -- I think it's also something that the market would sort of take care of. If at some point it gets slower and the connections get faster and the trash or the -- the problem, the thing that keeps it slow is the connect or the location of the data. Then at that point there ought to automatically be a trigger to localize data more. And I think in the end, the Internet is a worldwide thing. So we shouldn't have laws, at least not now, that enforce local data. But of course there is -- yes. It's something that the market should sort of solve, I would believe.
>> MOHIT SARASWAT: Thank you. So it brings us maybe to the close of this session. But maybe I would like to have a last questions from the panel. And just to kind of have their -- I mean, concluding remarks before we go into maybe if there is a question from the audience.
So I would like to understand from a regulatory perspective, from a legal perspective. Because there have been some issues which are affecting the Internet economy. Let's say if I take an example about intellectual property and copyright issues. So there were incidents where there were these issues reported, but generally it takes a very long time to address those issues. While in the case of the Internet world, we don't have that much of a time to kind of -- we don't have that luxury of time to address those issues.
So is there a way, how we can improve those? Can we have these things working at the speed of Internet? Your view, Ana?
>> ANA KAKALASHVILI: Do you mean what can legal, what can lawmakers do in terms of what?
>> MOHIT SARASWAT: Correct. When it comes to -- I mean, for example, passing -- if there is an issue of copyright on the Internet.
>> ANA KAKALASHVILI: I get it. I thought we were still on the previous point about the Internet.
>> MOHIT SARASWAT: Maybe you can have some comments on both.
>> ANA KAKALASHVILI: I agree with Thijl. If you talk about the speed and the smooth connection, et cetera, well, Government and lawmakers cannot do anything here. But when it comes to the regulatory part of the Internet, let's say about copyright on the Internet and stuff like this, I'd say yes, it takes a lot to pass a Bill. Let's take an example of the U.S. Congress. It's too much, too much time.
So what do you do in this situation is that you are generalizing the laws. So the law has not been -- it doesn't have to be very specific. And if, especially, if we come to the issues of Internet regulation, it just cannot -- the laws cannot keep up. Either you have to change the procedure and the period of time when a Bill can be passed in the Parliament, or you just keep the laws very generalized and also rely on regulators that can do the regulation in a faster way. So I say do not rely on Parliament and laws.
Also, I would say rely on the market itself. In this sphere, I am more to the right. And I do rely on market more than the Government and Parliament and et cetera.
>> MOHIT SARASWAT: Baher, would you like to add anything when it comes to data localization and maybe the speed at which the regulations are working?
>> BAHER ESMAT: Well, I can talk to the data localization part. I think that it is important why we are talking about digital economy and we're talking about how to improve and strengthen the ecosystem, that we also pay attention to building and developing local capacities. And especially in developing services and this third or top layer that includes everything. And in doing so, those local capacities can, you know, build Cloud services or develop Cloud services. They can start businesses online and so forth.
Now, to the question or to the point of where the data is located, I don't think it's a good idea to sort of enforce it or to enforce where the data is located. And, naturally, once you have the capacities in place and have the enabling environment in place from regulatory and financial sort of frameworks, you will get services and data to be available, you know, on your local infrastructure.
But in the absence of, again, the right environment, why would the small business provide services locally if they can get better, not only sort of business offers but often technical infrastructure security and so forth from a provider outside?
So as much as I understand the concern of some of the policymakers about data localization, I think that enforcing it plays against us, the sort of evolution and the development of the ecosystem.
>> MOHIT SARASWAT: So yes, we would like to have questions from the floor. Yes.
>> AUDIENCE: Thank you. I'll jump right in there, but I guess that's the point. On the deal of localization, I think the market portions will take care of that. But that's not the reason I'm jumping in. I don't want to leave the room without mentioning the cultural issue of the gender divide. We know there's 200 million fewer women who have access to the Internet than men. If we brought the women online and gave them the basic connectivity and digital skills that they need to utilize it, we could generate between $20 and $50 billion more for the global economy, so that is a big issue that we needed to address.
And I wanted to make one comment about the Empasa, which is a wonderful example. Obviously there are problems with the mobile money, but it does illustrate a very fundamental reality. If you give people basic connectivity and basic digitalliteracy, they will solve their own problems. Africans were disenfranchised from the banking system, didn't trust it, didn't have access to it. But they did trust their mobile phone. And, you know, so it's an Empesa is a African solution to an African problem by Africans with African technology. Maybe that is over utilized. We do need more research on the economic side and the World Bank study of every 10 percent penetration increasing as in the GDP. The bits I've seen of it, I think we will see more of the dark side, too, the disruptive side of the economy.
But anyway, I didn't think we could leave -- and we have one representative on the panel. But I see four Y chromosomes to one X chromosome. But there is the point.
>> MOHIT SARASWAT: Do we have any other questions?
>> AUDIENCE: Data localization. I don't have a question. I just want to share my view. Because I work for a Government, right? We only have two options. Either we bring people like Google, Facebook to Thailand to put in a datacenter, or we will build our own. It's as simple as that.
>> MOHIT SARASWAT: Any closing remarks from anybody on the panel?
>> STEVE SONG: Just on the issue of gender. It's a difficult one to address. But I think one of the answers lies in capacity building. And one of the things that NSRC has done is actually focus on trainings targeted at specifically at women. And it creates a different environment. A mutually reinforcing -- and I'm talking about training in terms of network engineers who design and build Internet networks. And building that culture of role models, of network engineers, I think, is one small part of that answer.
>> MIKE BLANCHE: We're doing closing comments?
>> MOHIT SARASWAT: Yes, right.
>> MIKE BLANCHE: Some very good points about the gender divide and getting more women involved in system subjects is very important as well.
So hopefully you learned a bit about some of the different levers and as we talked about and issues that need to be resolved to help develop the Internet economy. But I think one thought that I have as I sit here is that ultimately we shouldn't be talking about the Internet economy. We should be just talking about the economy. And ultimately all of the economy will depend on the Internet existing. I think that's a place we should aim to get to.
>> ANA KAKALASHVILI: Yes, I'm happy that someone else brought the gender issue up. But I don't see it as an issue. Because it's something that you have to work on. Because I don't like issues using this word when it comes to women's representation.
What I would love to see is companies and organizations like Google, ISOC, ICANN, do more with women empowerment. And I know ISOC does a lot, a lot of things like teaching women tech. I don't remember the exact name.
But yes, is it the final remarks?
>> MOHIT SARASWAT: Yes.
>> ANA KAKALASHVILI: Okay. Well, I think I've said enough, but I hope we can bring this discussion some more. I hope to see you next time. I don't know final remarks, I didn't prepare any. So just keep it like this.
Yes. Maybe someone else?
>> MOHIT SARASWAT: Baher?
>> BAHER ESMAT: Yes. Again just from a Developing Country perspective, again, the issue of the digital divide, how big or small it is, is not the issue. Again, the issue is the extent which communities, countries, are able to embrace the tools and the benefits of the Internet to help with the transition towards the digital economy. And in doing so, you know, there are multiple things that we discussed on this panel.
So what is important for Developing Countries today is to identify priorities, whether on the infrastructure side, whether on the services side, whether on the regulatory and policy framework side, maybe all of them, and to start to tackle them. Continuing to focus only on one aspect while ignoring the rest will not help. We have seen this in many countries in Africa and the Middle East, where, again, we have very good penetration rates in some countries, yet the real benefit of the Internet, people are not seeing it.
Thanks.
>> MOHIT SARASWAT: Thijl?
>> THIJL KLERKX: Yes, I also don't have a huge ending statement. But we should realize that of course the first time you do something on the Internet, that's always a bit -- it's exciting but also scary and you need to build trust. You also need time. You need to just try it. And we should accept that it takes some time. But I think if you look at what regulators and what lawmakers and everyone should do is let's not try to make it more scary to try something. So when it comes to making laws for the Internet, we should not start at making a law to give people a thousand dollars of fines for copyright infringement, but let's start on like, you know, making some general rules on how to make it safe on the Internet and how to make it easy and fun to use. So I think we should -- let's try to stimulate building the trust. And we need to accept it takes some time and some experimenting, but we shouldn't make it more scary.
>> MOHIT SARASWAT: Steve, the final remarks from you?
>> STEVE SONG: I would just like to see more discussion of Internet infrastructure at the IGF. It's the foundation on which the Internet rests. And not discussing it, and we don't really address the issues of access and affordability.
>> MOHIT SARASWAT: Thank you. We are on the time so I'll just take a minute to wrap it up. I want to thank you first of all for the great audience, for the great interaction what we have done. I would like to thank the panel for their comments and the diversity, what they have brought on to the table.
We have also discussed a lot of issues when it comes to access. We also talked about the issue of local content available to kind of increase. We also discussed the issue about the trust. I mean, how to increase the trust on the platform to make the Internet available.
So I would like to thank you, all of you, and I'm looking forward to seeing you soon.
Thank you.
(Applause)
(End of session 3:34)
(15:34)