Broadband Policy: Building on Success & Expanding

Ambassador David A. Gross, U.S. Coordinator for International Communications and Information Policy
Remarks at the Pike & Fischer Broadband Policy Summit IV
Washington, DC
June 13, 2008

Building on Success and Expanding Opportunities: Ambassador David A. Gross remarks at the Pike & Fischer Broadband Policy Summit IV

Thank you, Eric, for that very kind introduction. I want to thank Pike & Fischer and all the excellent speakers and panelists and the sponsors for what has been a wonderful summit these past two days. We have heard from the real experts on important issues such as where the ICT industry is going, what the government can do to further growth and innovation, and how an evolving regulatory environment is going to affect all this.

These are important discussions to have, and they are important to have not just here, but in other countries, too. From my vantage point at the State Department, I am discussing, along with so many of you representing your companies, these issues with governments around the world. We all can recognize that these issues are truly important on a global scale, not just good for business, but good for more and more people in order to connect them to the rest of the world, even in the hardest-to-reach places.

Let me begin with a reminder of how incredibly far we have come in just a short amount of time and the important implications of what is happening as a result. Over the past several years, I have watched the growth of the global ICT industry with much excitement and interest. As recently as the year 2000, Internet users worldwide totaled fewer than 400 million. That was an incredible number for its time, as I remember from my viewpoint in industry back then. We knew even then that Internet numbers were bound to soar. But we had no idea how fast and how much.

Today, beyond all expectations, the number of users is more than 1.3 billion - that is billion with a "b," an increase of more than three times. In that same time period, mobile phone subscriptions rose from 750 million in the year 2000 to today's nearly 3.5 billion - that is half the world's population. What has caused this tremendous growth? It was a combination of technical advancements by industry and academia, and by fundamental policy changes by governments around the world. Innovation by industry resulted in telephone and computer equipment, as well as networks, becoming significantly less expensive, much more powerful, and, therefore, available and affordable to a significantly greater number of people.

Along with those technological changes, we in the United States believed in the importance of policies that promote "enabling environments" of pro-competitive, technologically neutral, private sector-led, rule of law-based progressive regulatory policies and authority. And we are seeing that these have increasingly become the policies and beliefs adopted by more and more of the world, as was adopted unanimously at the 2003 and 2005 United Nations' "heads of state" World Summit on the Information Society.

For example, in India today, 269 million people have mobile phones, increasing at over 8 million each month. That is the equivalent of mobile phones increasing every month in India by more than the population of Finland whose population stands a little over 5 million people. And of course, I picked Finland because of its great leadership in the area of telecommunications.

In fact, I was just in Helsinki, where I saw firsthand the great success achieved by industry and government there. Now Finland has been added in India alone every single month. On this rapid growth, India's Prime Minister has said, "The key to the growth of telecom has been liberalization, reforms and competition." India, therefore, learned the policy direction it needed to take.

China had about 85 million mobile phone subscribers in 2000, a remarkable number back then. Today, at about 550 million mobile subscribers - with a population in the United States of only a little over 300 million - it gives you some order of magnitude about the number of users in China today. In China, it also increases by 6 to 7 million subscribers each month. Again, another Finland is being added each month.

Africa, certainly in percentage terms, is the fastest growing in the world for both mobile phones and for the Internet, with about 250 million wireless phones in that continent now and with a continent population of a little over 900 million.

For me, Pakistan is one of the most remarkable success stories. In 2000, there were about 750,000 mobile subscribers in the entire country. The Pakistani Government made certain changes about the way in which they regulated by increasingly liberalizing their market.

Today, there are about 85 million mobile phones in the country. Pakistan went from a mobile penetration rate of less than 0.5 percent to today being 52.9 percent. That is a remarkable change in just a very few years.

Iraq is another good example. Under Saddam Hussein, there were no cell phones for the general population for a variety of reasons - not the least of which, he did not want people who would be in opposition to him being able to communicate with each other.

Today, there are three companies providing mobile service to over 10 million customers in the country. The three licenses auctioned off last year each went for $1.25 billion plus a guarantee of 18% of the revenue going to the government. These are 15-year licenses, and these were all purchased by carriers in the region - an interesting economic bet by knowledgeable players in the region about what they view the economic future of Iraq will be. Quite extraordinary.

A similar change took place in Afghanistan. An important part of the Taliban's suppression was preventing people from being able to communicate with one another, so there were virtually no telephones and no access to the Internet. Afghans literally had to leave the county to make calls to family and friends living abroad. In 2001, Afghanistan had one of the lowest telephone penetration rates in the world with no mobile phones and less than 40,000 fixed line telephones in a country of 25 million.

Now, Afghanistan has over 5.4 million mobile phone subscribers plus five national and three regional highly competitive carriers. The amount of private, foreign direct investment in the country associated with telecommunications has exceeded $1 billion. It is expected that the annual revenue for 2009 for the Afghan Treasury from the communications sector alone will be over $100 million.

Now why did this happen? This happened for a number of reasons, and you are familiar, I suspect, with virtually all of them. It's a combination of the government encouraging private sector investment and promoting a competitive environment resulting in costs dropping dramatically, and of people's strong desires to communicate with each other. The Afghan government understands that if you liberalize with less state control and more independent regulators, you see remarkably good things happen.

I am certain we can all agree that government's public policy goals in the ICT field should be about maximizing the benefits of technologies and services for the people we serve. Therefore, for our part, as policy makers and industry leaders, the challenge is to provide a framework that will allow companies to provide affordable ICT goods and services to consumers, as well as to allow new ideas and approaches to flourish.

Now, because much of the discussion here has been about the future of the Internet, let me speak specifically to that. Tomorrow, I leave for Seoul, Korea, where I will lead the U.S. Delegation to the OECD Ministerial Meeting on the Future of the Internet Economy. I look forward to this gathering of about 40 Ministers and senior government representatives, representing all the OECD economies as well as additional key developing countries. In Seoul, we will agree to sign a Declaration, which outlines a framework for how governments should approach important policy and regulation issues regarding the Internet.

One of the things that makes the Internet profoundly different and makes our time profoundly different from any other time in human history, is the ability for everyone, when they have access to the Internet, to have access to the world's knowledge. The Internet is arguably the greatest facilitator for freedom of expression and innovation.

The United States recognizes the importance of freedom of expression and ideas and the free flow of information on the Internet to economic development and its influence in facilitating greater social and political debate. We are committed to maximizing freedom of expression and the free flow of information and ideas around the world.

We refer to such freedom of expression and the free flow of information and ideas on the Internet as "Internet Freedom." Increased access to the Internet allows citizens to express ideas and opinions more freely, encourages the expansion of democracy and accountable government, lowers the cost of doing business, creates new jobs, and expands the provision of education, health, and government services. For economies to realize the full potential of the Internet and related information technologies, they must maximize Internet Freedom.

As we all discuss what framework and important issues will need to be dealt with in order to connect the "next billion" people to the Internet, we understand that this will happen quickly. As you have been discussing at this Summit, with the rapid success of mobile phones and other wireless technologies, innovation and competition are quickly bringing Internet access and broadband to hard-to-reach places for the first time. Mobile phones are quickly becoming Internet portals, resulting in a truly world wide web.

Steve Jobs obviously understands that with his announcement this week of the release of the "iPhone 3G" in July. The focus in that product is the mobile phone running applications to serve as a computer with Internet access.

The implications of this revolution in affordability and availability are truly profound - economically, socially and politically. This also implies that increased pressure will be put on countries, especially in the developing world, to focus on infrastructure and capacity building. With access to the Internet comes a greater need for literacy and access to the education and tools that allow people to take full advantage of the technology and knowledge available to them.

I cast a somewhat broader net looking back a few more years than I did earlier. In the very early 1970s, according to Freedom House, there were probably only about 40 democracies, loosely defined, in the world. Just 40 - and 40 at the time was an extraordinary accomplishment. It was in fact unparalleled in human history to have that many democracies in the world at that time.

Today, without trying to be too precise either in definitions or numbers, there are approximately 120 democracies in the world according to Freedom House - some freer than others, but 120 democracies. A greater rise in democracy since the early 1970s to today, 30-odd years, than there has been in all human history.

Now maybe this was an accident. Maybe it's just one of those things that are bound to happen, but I don't think that's the case. It's not tied just to the Internet - though that clearly has played an important role. It's not just tied to the rise in the mobile phone - though clearly, that has played a role as well. But rather, it is, as you look back and take a look at the way the world has changed in the way we communicate over the past 30 years or so, that we see a radical and historic revolutionary change.

It is the daily news that you get, no matter what source you get it from, whether it's through newspapers or through the Internet, it is in fact your daily broadcast news. The fact that when something happens anywhere else in the world, you not only hear about it, but you see it. It has happened because of changes in technology. It has happened, because those changes in technology have brought the price of bringing information to us as individuals, to us as communities and countries, down in extraordinarily radical ways.

We should all - both policymakers and industry leaders - continue to ensure the benefits of these technologies for all people. Governments should work closely with the private sector to lay the groundwork for citizens' access to the best training, equipment, connections and protections for our systems. And through more discussions like the ones we have been having here, we can build on the success we have seen and ensure that the opportunities of the expanding Internet and ICT economy are available to all.

Thank you very much.

Released on June 16, 2008

ENDS

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