El Uso de Internet en las Américas, México DF, June 2005 Hernan Galperin USC/UdeSA.

Hernan GalperinUSC/UdeSA

El Uso de Internet en las Américas, México DF, June 2005



• Large CAPEX

• Built by large companies

• Licensed

• Run by operators

• Innovation from the center

• Small CAPEX

• Unlicensed

• Built by users

• Run by users

• Innovation from the edges

Top-down

Bottom-up

Two ways to build infrastructure



Local accesspoint

aggregationpoint

Core network

“First Mile”

Feederline

CPE

“First Yard”

The evolution of network architecture

Back-haul

Localwiring



Lakeview, December 2004: 1407 nodes



South Los Angeles

Photo credit: Hope Hall



South Los Angeles, February 2005: 282 nodes



What is driving bottom-up ICT development?

• New low-cost technologies reduce sunk costs, economies of scale

• Technologies are flexible, scalable, and standardized

• Regulatory reforms (right to connect CPE, license-exempt bands)

• Limitations of market-oriented reforms to extend services where private returns are negative



After over a decade of reforms…

• Modest access gains for the poorest

• Regulation gap closing, affordability gap remains problematic

• Implementing large-scale subsidy schemes (USFs) requires institutional capacity (e.g., Argentina and Brazil)

• Financing needs outstrip USFs



Fixed teledensity in Argentina, 1991-1998 (selected territories)

Territory Lines p/100 inhabitants Difference w/BA

1991 1998 1991 1998

Buenos Aires 16 26 0 0

Catamarca 4 9 12 17

Corrientes 4 9 11 17

Salta 3 8 12 18

Chaco 3 7 13 19

Misiones 4 8 12 19

Jujuy 2 6 13 20

Sgo. del Estero 2 6 13 20

Formosa 2 4 14 22

Total Argentina 10 19 6 7



Fixed telephony penetration in Argentina by income, 1991-2001

Income Deciles Household Penetration (%) Variation 1991-2001

1991 2001

1 15.9 23.4 7.5

2 18.3 40.0 21.7

3 34.3 53.8 19.5

4 32.9 57.5 24.6

5 40.6 68.7 28.1

6 46.0 80.4 34.4

7 56.9 81.4 24.5

8 62.5 86.6 24.1

9 73.7 89.4 15.7

10 82.8 94.1 11.3

Total 38.9 67.5 28.6



The bottom-up alternative

• Existing paradigm: How to create incentives for operators to extend networks and serve unprofitable customers?

• Potential alternative: How to create conditions for local actors to build and operate local networks, linked to trunk lines that connect to network core?



Potential advantages of bottom-up models

• Price/quality and types of services defined locally sustainability

• More efficient use of public subsidies (microfinancing programs such as REA)

• Leverage local assets and expertise (self-help principles)

• Local innovations• Builds local capacity and social capital

(externalities)



A long history

• Telephone cooperatives (Argentina)

• Community radio (Andean region)

• Local cable entrepreneurs (Paraguay)

• Municipal sanitation and irrigation systems (Brazil and Peru)

Diverse models for infrastructure development and management



Research agenda

Questions Methods Examples

When is it appropriate?

Which models?

Lessons from past?

Case studies

Best practice studies

Theoretical issues

Telephony cooperatives in Argentina

Wi-Fi cooperatives (Chancay-Huaral)

Theory of co-production (Ostrom)

What is the development impact?

Community surveys Mobile Wi-Fi project evaluation

Are there regulatory obstacles?

Survey to regulatory authorities

Spectrum availability

Licensing procedures

Interconnection rules

Financing



Regulatory obstacles for community Wi-Fi in LA&C

• Limited opportunities for use of license-exempt bands

• Obstacles for use of VoIP• Lack of flexible technical/service standards• Licensing procedures are too cumbersome• Unfavorable interconnection policies (no

asymmetric charges)• Lack of access to public resources

(funding, expertise)



Rules for Operation in the 2.4GHz Band

Brazil Chile Mexico Peru

Licensing basis

Secondary nationwide

Secondary, only certain regions



Power restrictions

400 mW in large cities

100 mW 650 mW 100 mW

Range restrictions

None Indoor use only

Outdoor use limited to 2,450-2,483.5 MHz

Indoor use only



For more information and project updates:

www.arnic.info

El Uso de Internet en las Américas, México DF, June 2005 Hernan Galperin USC/UdeSA.

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