Internet Diffusion/Access

Kagami et al are more specific in narrowing the concept to internet diffusion, arguing that a critical measure of internet diffusion is the share of the US among global internet users, and that the growing disparity in internet access among countries or

45 _{Webopedia dictionary at: http://isp.webopedia.com/TERM/D/digital_divide.html), accessed}

socio-economic groups is called the ‗Digital Divide‘.46 By all accounts in terms of internet population and the penetration rate of internet access, the US leads the

world47. Kagami argues that ―a deepening digital divide in the Internet age is a critical policy issue because the Internet as a general purpose technology has become

essential not only for communications needs but also in economic, social and political arenas.‖48

At the multilateral level, the OECD has defined the Digital Divide as the difference in internet and electronic commerce access opportunities between OECD and non- OECD countries. More specifically that the term Digital Divide refers to the ―gap between individuals, households, businesses and geographic areas at different socio- economic levels with regard both to their opportunities to access information and communication technologies (ICTs) and to their use of the Internet for a wide variety of activities.‖ 49

The most basic indicator of the digital divide is the number of access lines per 100 inhabitants. In its report, Understanding the Digital Divide, the OECD also draws on the distinction between penetration rates in terms of the number of lines per 100 inhabitants, but also as to the level of digitalisation (the number of lines or switches that use digital as opposed to analogue technology50). Those countries with

46

Kagami M. Tsuji M., and Giovannetti E., Information Technology Policy and the Digital Divide:

Lessons for Developing Countries, Edward Elgar, London 2004, p.62.

47 _{See Nielsen/NetRatings, Global Internet Index 2001, cited in Kagami et al, ibid at p. 63. That the US}

has pioneered the development of the Internet and leads the world in the global export of electronic intangible products is partly due to its success in developing at an early stage effective competition in telecommunications services and access to telecommunication networks. This is due to legislative reform and market reform (the break-up of AT&T and the introduction of the US Telecommunications Act 1996), but also to the extension of the concept of universal service to internet access under s.254(b)(2) Telecommunications Act 1996 which provides that ―access to advanced

telecommunications and information services should be provided in all regions of the Nation‖. In looking at universal service, it is important to distinguish it from universal access. A universal access obligation refers to an obligation on an operator to provide for a functioning, affordable public

telephone facility that can be reached by the whole population of a country, and that inhabitants of rural regions can have equal access to a telephone at similar prices as those living in cities. Universal service by contrast is subtly different, setting out an obligation on an operator to provide a minimum level of service to the home, and on-demand (request for connection). Universal access mainly refers to providing access to an affordable public or community telephone, and which is not subject to a request for connection in the same way as universal service. See Cave M., Milne C., and Scanlan M., Meeting

Universal Service Obligations in a Competitive Telecommunications Sector, Report to DGIV,

European Commission, March 1994.

48

Kagami M. Tsuji M., and Giovannetti E., Information Technology Policy and the Digital Divide:

Lessons for Developing Countries, Edward Elgar, London 2004, p.62. 49 _{Understanding the Digital Divide, OECD/DSTI, 2001, p.5}

50 _{Digital technology works purely in terms of binary codes of ―1‖ or ―0‖ sending small packets of}

information along transmission lines, whereas analogue technology works by way of transmitting information in the form of electromagnetic waves, which requires much higher bandwidth (the capacity of the transmission pipe) and also a dedicated point-to-point link. Digital information can be sent by

the least developed networks in terms of network reach but who have been able to quickly replace analogue switches with digital switches have had the highest digitalisation among non-member OECD countries for most of the 1990s, even though saddled with low penetration rates. A digital network is important for the least developed countries (LDCs) as it provides a basic platform upon which network extensions can be built: the digital divide is as much about network access as having the latest technology.

One aspect of the digital divide concerns access to the telecommunications (voice) network, but another concerns pure internet access: here the OECD measures the digital divide (as regards the internet) in relation to the penetration rate for internet

hosts (the number of internet hosts per 1000 inhabitants)51. The OECD reports that while Africa, Asia, Central and South America are increasing their penetration rates, the pace is very slow. Although by 31st December 2011, total African internet users numbered 139.8 million (13.5% of the African population) with Nigeria the highest at 45 million and Tunisia the lowest at 3.9 million, in Asia, the total number of internet users (2011) was 1.01 billion with China at 477 million and Malaysia at 16.9

million.52 In Asia, the growth rate is mainly attributed to OECD Member countries. This means that the international digital divide, as measured by the number of internet users, is beginning to be addressed. For example, in October 1997, the digital divide in Internet host penetration between Africa and North America was a multiple of 267. By October 2000, this had grown to a multiple of 54053. According to the OECD (Communications Outlook 2011), as of January 2010, the number of internet hosts worldwide exceeded 730 million (up from less than 72 million in 2000).54 The number of webservers worldwide grew from 33 million in mid 2008 to nearly 46 million in mid 2010. However, data growth almost halved from 67% (2006-08) to 38% (2008-2010) because of economics of growth of cloud computing.55 As regards

way of a myriad of paths, not requiring a dedicated link. This in turn leads to digital technology being cheaper and easier to set-up, manage, and operate.

51 _{An internet host can be defined as any computer on a network that is a repository for services}

available to other computers on the network. A host machine can provide several services, such as

SMTP (email) and HTTP (web). See Matisse Enzer‘s dictionary of internet terms at:

http://www.matisse.net/files/glossary.html#H, date accessed November 2010.

52 _{www.worldinternet stats.com, accessed April 2011.} 53

Supra note 42.

54 _{OECD Communications Outlook 2011, p. 173.} 55 _{Ibid, p. 174.}

the digital divide with respect to electronic commerce, the OECD defines a key indicator as the number of secure servers in each country56. In 2010, the OECD estimated that 63.3% of all secure servers are located in the OECD area, while the other 36.7% are attributed to firms in non-member countries.57

Further analysis and measurement of the Digital Divide58 can be found in the research of Wong who evaluates the Digital Divide in Asian countries based on penetration levels of telephone main lines, PCs and internet use59. By analysing comparisons of the scale of IT adoption relative to national income, Wong finds that that the Digital Divide in Asia is wide and has the potential to become more severe. Kraemer and Dedrick look at a panel of 40 Asian and non-Asian countries over the period 1995- 2000 finding that there is a large and growing divide within the Asian block itself, and a large and growing divide between non-Asian and Asian countries60.

What is the significance of this link between internet diffusion and the digital divide? We can summarise that the growing disparity in internet access among countries or socio-economic groups is called the ‗Digital Divide‘. Also that the divide refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard both to their opportunities to access information and communication technologies, the level of digitalisation, and the penetration rate for internet hosts.

Therefore the important factors that could influence our definition of the digital divide should include the gap in opportunity to access information and communications technologies (which presumably would also indicate a disparity in internet access). To address the digital divide therefore, we need mechanisms in IEL to address any

inequality of access to information and communications technologies.

56 _{A secure server can be defined as a computer, or a software package, that provides a specific kind of}

service to client software running on other computers. It is made secure through the use of an encryption technology (such as a secure socket layer protocol).

57

OECD Communications Outlook 2011, p. 175).

58 _{Also cited and further reviewed in the work of Dewan, Ganley and Kraemer mentioned above.} 59 _{Wong, P.K., ICT Production and Diffusion in Asia: Digital Dividends or Digital Divide?}

Information Economics and Policy 14(2), 167-187, 2002.

60

Kraemer K.L and Dedrick J., Information technology in SouthEast Asia: engine of growth or digital divide? in Information Technology in Asia: New Development Paradigms (eds CS Yue and JJ Lim), Institute of Southeast Asian Studies, Singapore, 2002.