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									Negotiating Internet Diffusion in Africa: Role of International Cooperation


I. Introduction


The purpose of this chapter is to identify, analyse and evaluate the main negotiation issues
articulated and pursued by international development actors in promoting Internet diffusion in
Africa. From protecting the environment, fighting diseases such as malaria and AIDS, to
instituting labor standards and combating corruption, bilateral and multilateral institutions have
played a significant role in Africa since independence. Similarly, discussions, debates and
interactions between international actors and states were among the key factors that shaped
Internet diffusion in Africa over the last decade.


Virtually every donor agency can claim some stake in Internet diffusion in Africa. Donor
agencies were the source of computer and software infrastructure that underline Internet growth
in Africa. While some international institutions provided direct support to Internet development
by making financial aid and equipment available, building human resource capacity, and
providing consulting services, others included ICT support in their funding of development
projects like construction of roads and management of water resources1. International institutions
argued for lower tariffs on PCs, financed the purchase of computers and subsidized their
shipping costs2. The institutions involved include bilateral and multilateral donor agencies,
development banks, multinational private sector corporations and research and academic bodies.


This chapter is not concerned with all these institutions and the wide range of topics pertaining to
international cooperation and Internet diffusion in Africa. It limits itself to the examination of
critical negotiation issues advanced by key institutions that were involved in the negotiation of
Internet diffusion in Africa.




1
  Hafkin, Nancy and Kate Wild, ICT in Africa: The Challenge to Donors in the Global Information Society, In
Rowing Upstream - http://www.piac.org/rowing_upstream/chapter5/full_chapter_5.html
2
  John Daly, Personal communication


                                                     1
Negotiating the Internet is an international undertaking that has grown increasingly complex over
the last decade.3 International institutions that participated in the negotiations of Internet
development in Africa range from a few academic and research institutions that provided support
for the first Internet connectivity as early as 19924 to hundreds of development actors that were
dealing with consequences of the “digital divide” by 2003. At the beginning, lobbying,
demonstrating unfamiliar technology, and getting the equipment into a country were among the
major preoccupations of a relatively few research institutions. At that time, the Internet had
minimal government oversight in most countries and most of the negotiations proceeded without
controversy. As shown in the country case studies in this volume, the debates and negotiations
took place mainly between technical people at local levels and the incumbent
telecommunications operators.


The situation changed soon after the Internet gained a foothold in Africa. Governments realized
the potential of the Internet at just the time they were grappling with the global wave of
telecommunications sector reform. The desire of states to control the Internet within their
national borders combined with the sector reform under way led to intense dialogue between pro-
reform international actors and defiant policy makers and operators. Negotiations continued to be
fuelled by rapid changes of technology, globalization, and domestic social and political changes.
The conflict between the two camps continues into the present.


This study shows that the history of Internet development in Africa is very much linked to the
story of negotiations between diverse international actors and states. Internet diffusion has been
and continues to be a calibration of policies by governments, particularly in the
telecommunications sector, beginning with cooperatization of state owned companies, followed
by privatisation and competition, and culminating with the negotiation of complex issues such as
pricing, Voice Over IP, and interconnection and peering between service providers at local and
regional levels. Figure 1 lists the major institutions involved in this debate and the intensity of
negotiation between States and international cooperation actors.



3
  John Daly, Donors and Negotiating the Internet in Africa, http://stconsultant.blogspot.com/2002_12-
01_stconsultant_archive.html
4
  Full Internet connectivity was available in South Africa for the academic and research community as early as 1992


                                                         2
             Fig.1. The Universe of International Cooperation in ICTs in Africa and intensity of negotiations
             of Internet diffusion (Key– colour intensity indicates negotiation intensity, key institutions that
             participated in negotiation are marked in blue)


                                           Negotiating
                                           ICT
                                           difussion
     Direct ICT Support                                        ICT Support as part of
     finance, equipment, skills,                               development programmes
     human resource




Research                                                 Multilaterals
AAAS
NAS                                                                           United    Foundation          Private
ISOC                                                                          Nations   Carnegie            Sector
                                                               Inter-
NSRC                                                           governmen      ITU       Kellog              CISCO
               Bilaterals                                                     UNESCO
                                                               tal                      Ford                HP
                                                                              UNDP      Markle
               USAID                                                          ECA
               GTZ                                             European                 Acumen
                                   Gover       IFI & RDB
               IDRC                                            Union
                                   nment       World Bank
               CIDA                                            OECD
                                   al          IMF
               CF                  CTO         RDB
               DFID                IICD
               BMZ
               SDC
               SIDA


               USAID                                                                                  NGOs
                                                                                                      SatelLife
                                                                                                      VITA
                                                                                                      NTSC




             Within Africa, in addition to governments, the United Nations Economic Commission for Africa,
             regional economic communities like the Economic Community of West African States
             (ECOWAS), the Southern African Development Community (SADC), and the Common Market
             for Eastern and Southern Africa (COMESA), and associated regional regulatory organizations
             such as Telecommunication Regulators Association for Southern Africa (TRASA), played



                                                                         3
significant roles in coordinating inter-regional and intra-regional negotiations on ICT
infrastructure and applications. African regional political organizations like the African Union
and the African Telecommunications Union have also contributed to the debates. In fact,
working through these institutions became a mantra at the end of the decade despite the
unremitting weakness of intergovernmental bodies in sustaining their existence while at the same
time pushing negotiable agendas through their constituencies.


Interestingly, despite claims by many players, the number of institutions that actively
participated in intense, strategic, political and financial negotiations of Internet development in
Africa was relatively small. The World Bank, United Nations Development Programme
(UNDP), Economic Commission for Africa (ECA), United States Agency for International
Development (USAID), International Development Research Centre (IDRC), Coopération
Française, and Department for International Development (DFID) were the key institutions that
participated in these debates, discussions, and negotiations. These institutions had not only
expertise of the negotiation process and understanding of financial, transactional, restructuring,
divestiture and tax issues (knowledge power), but also had instruments such as aid, loans and
credits (conditional power) that influenced negotiation outcomes. In addition to the “stick” of
conditionality, international actors employed “carrots” (empowerment strategies) that aimed at
strengthening selected domestic actors that allied with them and negotiated on their behalf
(associational power) at local levels. The use of conditionality, knowledge and associational
powers was phenomenal. These three instruments were used by different international
cooperation agencies to influence different outcomes at different times.


Contrary to explanations for the interest of international actors in promoting Internet diffusion in
Africa such as searching for additional markets, north domination of the south, technology
promoted as a panacea, and technology as promoting recolonialization, this study argues that
every step of Internet development in Africa was negotiated by domestic and international actors,
and that the international actors could not have made entry into the continent without the
assistance of domestic innovators who saw the potential of the technology. It was the changing
negotiation technique, institutional configuration and substantive negotiation issues that accounts
for changes in the pace of Internet growth over time. The remainder of this chapter focuses on



                                                  4
the key actors and the strategies they employed in manoeuvring the diffusion of the underlying
computer and software infrastructure, reforming the communications sector, shaping government
and institutional policies and negotiating Internet diffusion in Africa.


    II.     Negotiating Internet Diffusion in Africa


Before the 1990s, globally, the Internet was mainly a hobby for a few “techies” and was not
heard of in Africa. The focus then was on telecommunications infrastructure development to
make up for the “missing link.” Realization that public sector monopolies could not attract the
huge investment needed for rolling out new infrastructure changed the focus of states from
building the infrastructure to sector reform. A whole host of factors spurred telecommunications
sector reform around the world by 1990: the desire to improve telecommunication services, rapid
changes in technology and technological convergence, tightening of public sector budgets,
telecommunications criteria established for inclusion in the World Trade Organization, and the
pressure of International Financial Institutions (IFIs)5.


Yet reforms were also resisted. The opponents to reforms argued fiercely that liberalization could
harm their efforts to promote universal service and offset the “missing link,” and that
restructuring would threaten national security and other communal goods. The proponents
expressed concerns about the failure of the status quo to achieve the same socio-political
objectives6 that policy makers argued for. In retrospect, this conflict between proponents and
opponents of sector reform remained one of the key battlegrounds throughout the period of
Internet development in Africa.


The onset of the Internet just at the time when some governments were trying to grapple with the
implication of telecommunications sector reforms exacerbated the conflict. For reform
proponents, especially international actors, the old regime was viewed as a centralized monopoly


5
  Wallsten, Scott, An Empirical Analysis of Competition, Privatisation and Regulation in Telecommunications
Markets in Africa and Latin America, World Bank Policy Research Paper 2136,
http://econ.worldbank.org/docs/553.pdf
6
  See for example ITU, Trends in Telecommunications Reform 2002 ,
http://www.itu.int/publications/docs/trends2002.html


                                                       5
and a drain on public resources7, and ultimately was regarded as an obstacle for Internet
diffusion. For governments it was the opposite. The retreat from a strategically important
telecom sector and loss of sizable and stable revenue streams was unacceptable. At that time, the
African policy makers could not envision the role of liberalization in satisfying consumer
requirements while at the same time meeting public policy goals. Moreover, it was felt that the
Internet could undermine their capacity to control information flows and reforms, which many
felt threatened their legitimacy. The fear of Internet use for political subversion was high in some
countries as they grappled with guerrillas, rebels, opponents and Diaspora elites vehemently
arguing against the governments’ legitimacy. As stated by one high official, “[the] Internet has
stripped us of information and exposed us to our opponents; nothing is left to hide.”8


At the same time, international actors like the World Bank, the International Telecommunication
Union (ITU) and the United States Agency for International Development (USAID) remained
adamant. They kept on putting pressure on states to liberalize the telecommunication sector and
promoting development of the Internet and diffusion of computers and software. They disputed
that one could not untangle Internet diffusion from the quality and availability of
telecommunications and computing infrastructure. They also argued that African countries could
not attract foreign investment nor be internationally competitive by closing their doors to sector
reforms. For most of the 1990s, the World Bank and IMF pressed the privatisation of incumbent
telcom operators and made liberalization a condition for release of additional financial supports.
USAID made cost-based tariffing a condition for its grants to set up network operation centers in
a number of African countries. The negotiations and debates between states and these
international actors remained intense for most of the decade.


The appalling performance of state-owned telecommunication companies was also cause for
concern. Monopoly operators kept outdated and poorly maintained networks and operated under
unsustainable financial models that cross-subsidized international and local calls or urban and
rural services. Nor were they able to cope with growing demands for telecommunications. There


7
 Wilson, Ernest, Inventing the Global Information Future,
http://www.cidcm.umd.edu/library/papers/ewilson/futures.pdf
8
    African Minister, Personal Communication


                                                      6
were 3.4 million people throughout the continent who could easily afford telephones but who
were waiting for the telecoms to deliver. Ironically, there are still about the same number of
people waiting for telephones in Africa today.


In part, the proponents of the reform won the battle. Almost all countries permitted private
investment in cellular services, paging and Internet access by 2000. Forty percent of African
countries allowed privatization of their fixed networks by 20039. Internet access expanded from
less than five hundred people in 1993 to somewhere between five to eight million by 2003. The
number of cellular subscribers overtook that of fixed lines by 200110. The process demonstrated
that small, private enterprises could provide reliable, exceptional services that the monopolies
failed to provide11. Moreover, the negotiations between international cooperation actors and
states were important in setting Internet diffusion on course, putting all African countries on the
connectivity map and in the position to address the “digital divide” towards the end of the 20th
century.


However, it is important to recognize that the outcomes of the negotiations, disputes, contentions
and discussions varied from one country to the other. End results reflected the complex social,
political and economic settings of countries involved, and Internet diffusion mirrored the extent
to which countries privatized their telecommunications sectors and developed computing
infrastructure (see Box I). The outcome by the end of the decade resulted in three different
positions:
       Those countries that were reluctant to open their markets to liberalization of the
        telecommunications sector;
       Those countries unable to attract international actors either due to their internal instability
        or limited investment promises;
       Those countries that showed interest in conforming to global economic norms and that
        had successfully liberalized their communications sector.

9
  ITU, Trends in Telecommunications Sector Reform 2002,
http://www.cidcm.umd.edu/library/papers/ewilson/futures.pdf
10
   Hamilton, Paul, Hamilton, Mobile: New Markets, Un-seized Opportunities, In Hamilton Paul, ed. The African
Communications Infrastructure and Services Report 2002/2003. AITEC Africa, 2002
11
   Wilson, Ernest and Kelly Wong, African Information Revolution: a Balance Sheet, Telecommunications, Policy
27(2003) 155-177.


                                                      7
The first group of countries included Ethiopia, Malawi, Nigeria, Zambia and Kenya. The
reluctance to open up their markets to liberalization resulted in lackluster performance in ICT
diffusion. Ethiopia, Malawi,           Box I. Privatisation of Fixed Line Communications
Nigeria, Zambia were among             Sector in Africa that mirrors three different positions
                                       of the outcomes of negotiations
those countries able to stand up
against the coercive force of           Markets with incumbent privatised
                                       Cote d’Ivoire, Guinea, Ghana, Lesotho, Mauritius,
international pressure for change      Morocco, Senegal, South Africa, Tanzania, Uganda
for a longer period. Kenya, on
                                         Markets planning to liberalize
the other hand, promised               Botswana, Burkina Faso, Burundi, Cameroon, Egypt,
structural reform and                  Eritrea, Ethiopia, Kenya, Malawi, Mali, Mozambique,
                                       Nigeria, Togo, Tunisia, Zambia, Zimbabwe
liberalization of
telecommunication services only          Countries with no intention to privatise fixed
                                          lines
to refuse policy changes once the      Angola, Benin, Chad, Comoros, Congo, Democratic
international assistance arrived.      Republic of Congo, Djibouti, Gabon, Gambia, Liberia,
                                       Libya, Namibia, Niger, Sierra Leone, Swaziland
All in all, Internet growth in
these countries showed a               Source: ITU Trends in Telecommunications Reform
                                       2002, Paul Hamilton, The African Communications
momentarily spike then stalled
                                       Infrastructure & Services Report 2002/03
thereafter. Here, the negotiations
between international actors did not lead to immediate policy calibration, but rather to a
painstakingly slow and stepwise process.


Negotiations between these countries and the IFIs were relatively equal, and they were able to
resist external pressure by delaying the process or refusing to open up their markets. At the same
time, the majority of these countries were too weak institutionally to implement the necessary
policy changes, manage their economies and invest in the human and social capital needed to
move Internet growth forward. They anchored their negotiations on maintaining the status quo.
Finally, several of these countries were in the middle of internal social and political conflicts that
shaped their “wait and see” positions.




                                                  8
Countries that can be grouped into the second category include Angola, Chad, Comoros,
Democratic Republic of Congo, Liberia and Sierra Leone. These were unable to attract
international aid and investment for telecommunications reform either due to their internal
instability or limited economic capabilities. They had a limited capacity to deal with the myriad
technological, regulatory, and economic issues involved in the reform process. These countries
faced a decline in official development assistance which worsened their situation and left them in
a nearly impossible negotiating position to affect any reforms.


The third group of countries were the so-called “favoured nations” that showed interest in
conforming to global economic norms, and that had successfully liberalized their
communications sectors. Ghana, Mauritius, Morocco, Senegal, South Africa, Tanzania and
Uganda belong in this category. These countries benefited from well-intentioned largesse from
donors, including many forms of training and technical assistance that enabled them to craft open
telecommunications policies that in turn attracted foreign direct investment and competition.


Some like Morocco, Senegal, South Africa and Uganda have managed exemplary and
comprehensive reform processes, including privatization, competition and regulation that
resulted in significantly higher rates of telephone penetration and better quality of service. Their
consistent policies paid off with rapid Internet diffusion and a competitive and vibrant Internet
market. They also enjoyed new investment flows from the private sector and support from
donors to launch a range of more advanced business services.


The culture, values, viewpoints, interest and experience of local institutions were key variables
that determined the success or failure of negotiations with the international promoters of sector
reform. International actors offered different levels of technical and managerial assistance to
different institutions in different countries, depending on their own willingness and ability to
reform. There were always tensions between the neo-liberal values of the International Financial
Institutions and the concerns of the states which often felt the IFIs failed to appreciate the
underlying social, economic, and political dynamics of the countries concerned. Additionally, the
local institutions had difficulty responding in a timely manner to rapidly changing global trends
in the sector. In those countries that succeeded in negotiating with international actors and



                                                  9
moving the reform process along, government leadership was often a key factor in unlocking
gridlocks and diffusing tensions between the different parties.


International assistance organizations have never operated as a unified negotiation unit. While
joint negotiations were possible in some cases, particularly in the area of telecommunications
reform and pricing, there were many occasions of uncoordinated and competitive initiatives
between international development agencies. In some cases, these key players were so out of
touch with one another that they were unaware of similar initiatives by other actors within their
own institutions. Experience of the Partnership for Information and Communication Technology
(PICTA)12 showed that the exchange of information on plans, policies, development models, or
lessons learned from past experience was difficult to achieve. Initially, there were collaborations
among institutions like USAID, the World Bank and UNDP. Harmonization of policies became
trickier as the critical negotiation issues expanded and the number of institutions participating in
reforms grew. In addition, the convergence of Internet diffusion with telecommunications issues
towards the end of 1990s and the growth of the digital divide made group efforts even more
complex.


As a result of this dynamic, results from the reform efforts were often less than spectacular. For
example, despite extensive support in setting up regulatory frameworks, there has been mixed
success in the institutional capacity,independence, and legitimacy of regulators in enforcing
policies and rules. In addition, despite moving away from traditional public monopolies, most
governments are still unwilling to allow unrestricted entry into the market, and are unable to
eliminate limits on private and foreign ownership. Further, while most countries allowed private
Internet Service pPoviders (ISPs), the majority preserved government control over national
gateways to which ISPs connect. At the extreme, countries like Ethiopia still maintain a
monopoly over Internet service.


In effect, the critical issues that were debated by international actors and states changed over
time as new issues became pressing and old issues were resolved. The changing focus by


12
     www.uneca.org/aisi/picta



                                                 10
international actors from infrastructure to telecommunications privatisation to competition and
then to broad-based policies, has largely determined the outcome of Internet development on the
continent. For instance, the renewed focus on global information society policies in the mid-
1990s may have slowed the momentum of privatisation and infrastructure rollout in turn
discouraging private sector initiatives. To an extent, development aid did crowd out the private
sector in the mid-1990s by subsidizing access which otherwise could have been provided by the
private sector. This also deprived emerging service providers a chance to hone their skills, build
their customer bases and create new jobs. The debate and discussion focused on creating a
particular “information society,” modeled on initiatives such as the Global Information
Infrastructure (GII) agenda of the developed world in the 1990s, significantly hurt African states
by preventing them from developing demand led strategies that met their local needs and
circumstances13. My own observations between 1997 and 2002 are that focus on information
society strategies, beyond creating political clout, did not lead to strong negotiations or
outcomes.


During the decade of Internet diffusion in Africa, negotiation issues evolved. The anxiety about
unequal access to ICT brought universal access and digital divide issues to the negotiating table.
Likewise, issues that were not apparent at the beginning of the decade such as Voice over IP,
local Internet exchange points, Internet governance, and regulations pertaining to wireless
technologies such as Very Small Aperture Terminals, have became important by 2003 changing
the dynamics, the stakes and number of actors, and the critical negotiations issues at local and
international levels.

These contradictions, diversity of approaches, evolving critical negotiation issues, and the
fascinating variety of responses by states and international actors represent the story of Internet
diffusion in Africa. What were the most critical negotiation issues? What patterns were emerging
over the last decade and what were the ensuing outcomes? What were the key political and
institutional frameworks that influenced favourable and unfavourable policy outcomes for
Internet diffusion in Africa? Will the growing contradiction between African governments’

13
  Mellody, William, Designing a Workable Telecom Regulatory Structure for 21st Century Information Societies,
http://www.lirne.net/resources/tr/conclusion.pdf



                                                      11
promises to participate in the global economy and their real performance in accelerating sector
reforms be managed effectively by changing the negotiation instruments? What should
international actors do to alter the dynamics between the private sector, civil society and the
government in order to bridge the digital divide? What strategies should be promoted to foster
collaboration between different international cooperation players to complement each other’s
work and reduce duplication of efforts?

This chapter aims to address these questions by analysing three critical negotiation issues that
emerged between international actors and states over the last decade. A case study is presented at
each stage to illustrate how international institutions negotiated Internet diffusion in different
countries.


     III. International Cooperation in Internet diffusion in Africa


     a. The Universe of International Cooperation and its significance to Africa
It is important to understand the underlying dynamics of international cooperation in order to
analyze the critical negotiation issues pertaining to Internet diffusion because the negotiations
reflected the fluidity of values and norms of the international institutions. The International
cooperation landscape that participates in Internet development is composed of many institutions
with sometimes overlapping roles. Bilateral assistance is a country-to-country partnership,
usually a cooperation agency from the donor state working directly with a particular ministry
from the recipient state. Bilateral aid is provided mainly in the form of grants for development
projects, but the process of deciding on which countries get which grants is largely determined
by a complex set of historical, political, commercial, and foreign policy factors.


The multilateral format involves many actors working in cooperation with many countries. Its
format varies widely with one division between those giving grants and those providing
assistance in the form of loans. Regional development banks like the African Development Bank
and the Bretton Woods institutions,14 known as International Financial Institutions (IFIs), focus

14
  The World Bank itself is composed of a group of organizations consisting of the International Bank for
Reconstruction and Development (IBRD) founded in 1946, the International Development Association (IDA)
established in 1960 to provide concessional loans and grants to low income countries, the International Finance


                                                        12
mainly on loans. They must work within an environment that includes such challenges as violent
conflict, disease, the digital divide and limited social investment and that “require[s] not only
innovative operational approaches, but also greater flexibility, including a carefully defined
ability to provide grant financing.”15 Regional development banks frequently rely on the IFIs for
co-financing and for information on which to base their country loans and programmes.


The IFIs are generally dominated by a few powerful donor countries that influence their policy
directions by appointing influential figures to their boards, attending meetings and debates, and
evaluating their funding proposals. Because of this influence of a few powerful donors, the IFIs
promote a neo-liberal economic agenda to which the dominant nations subscribe. The influence
of these institutions is indeed much deeper because multinational corporations in the dominant
states also use ties to the IFIs to promote their corporate agenda. The IFIs were influential at
virtually all stages of ICT negotiations in Africa.


A key program of the IFIs that had significant bearing on Internet growth in Africa was
Structural Adjustment. Adopted in most African states in the 1990s, Structural Adjustment
Programmes (SAPs) called for privatisation, liberalization of major development sectors,
promotion of exports, and the reduction of public expenditures. The World Bank argued that
SAPs could improve a country's foreign investment climate by eliminating trade and investment
barriers and thereby boosting foreign exchange earnings, promoting exports and reducing
government deficits through cuts in spending. Critics of SAPs, however, dispute that these
measures have aided African economies and assert that in fact they have made the quality of life
of the poor worse by increasing costs of basic services, increasing unemployment, selling-off
natural resources and decreasing public spending18. In a bid to close the gap between opponents
and proponents of SAPs, the World Bank formulated Poverty Reduction Strategy Papers

Corporation (IFC) founded in 1956 to lend to private sector institutions, and the Multinational Investment Guarantee
Agency (MIGA) created in 1988 to give private sector investors guarantees against expropriation and repatriation
risks in developing countries.
15
   International Development Association, IDA, Grants and Structure of the Official Development Assistance,
January 2002, available at
http://siteresources.worldbank.org/IDA/Resources/Seminar%20PDFs/grantsANDstructure.pdf
18
  various institutions, workshops and meeting tend to criticise Structural Adjustment Programmes and its impact in
Africa. Among these are the Bretton Woods Project, http://www.brettonwoodsproject.org/index.shtml, Jubliee
2000, http://www.jubilee2000uk.org/, Halifax Initiative, http://www.halifaxinitiative.org,


                                                        13
(PRSPs) in 1999 that aimed at helping countries devise their own social and economic priorities
through consultations between governments, businesses and civil society, with the IFIs playing a
supportive role.


This general trend of economic liberalization during the last four decades had a significant
bearing on specific ICT discussions19 in the 1980s and 1990s. As outlined in the next section,
Structural Adjustment Programmes had substantive impact on telecommunication sector reform.
In retrospect, the shift of policy direction by IFIs is to a degree responsible for the dynamics of
Internet negotiations in Africa. In most cases the IFIs led the way and governments followed.


Other multilateral institutions like the United Nations System and the European Union (EU)
make grants available for Internet development. European Union grants to Africa reflect the
Cotonu Convention that defines EU member States’ commitment to trade, investment,
development, humanitarian and strategic programmes. Though assisting in the delivery of
Internet related equipment and services, the European Union has not been a player in direct
negotiations on Internet development in Africa.


The United Nations, on the other hand, delivers its grants through an array of development
agencies and has played a major role in trying to coordinate between development actors in
Africa. Through its Resident Coordinator system, United Nations Development Programme
(UNDP) is instrumental in harmonizing initiatives between various agencies at national levels
and has been developing national Development Assistance Frameworks (UNDAF) to coordinate
interventions by aid agencies. Over time, the UN’s grants have diminished while its focus has
turned to providing policy advice and institution building.20. Although country advice could have
a cumulative impact on policy calibration, the UN system was reticent from confronting
countries to make policy changes.


Indirectly, the UN system was part of all the telecommunications negotiation processes and
through its various agencies was supporting dialogue that laid the foundations for ICT diffusion


19
      John Daly, Personal communication
20
     http://www.undp.org


                                                  14
in the developing world for over three decades. One of its oldest agencies, the International
Telecommunications Union played a leading role in advancing negotiation issues in
telecommunications infrastructure development and reform. The UN’s regional social and
economic development arm, the Economic Commission for Africa (ECA), was leading the effort
to harness information technology for development in the region. Most recently the United
Nations was involved in the global bid to address complex development challenges including
conflicts, environmental decline, global terrorism, the HIV/AIDS epidemic, and long-term social
and economic inequalities through ICTs. One growing concern within the UN is how to utilize
ICTs to support the Millennium Development Goals that aim to reduce poverty, raise education
levels, improve health standards, enhance empowerment, and reverse the loss of environmental
resources.21 The UN’s role as “a consensus forum between nations” makes it difficult for the
institution to also play a role in negotiating sustainable outcomes for Internet diffusion.


The United Nations has remained the most “neutral” venue in which to hold regional debates on
Internet and ICT development in Africa. It is also the forum in which developed and developing
countries, multinational private sector companies, and trans-national civil society organizations
try to advance their own agendas. The birth of diverse global institutions with different agendas
is one of the key phenomenon of international cooperation and conflict in Internet development
over the last decade.


     b. International Cooperation in ICT Diffusion in Africa
Before 1990, the IT field was limited to a few a champions that worked hard to link academic
and research institutions. The roles of these vanguard institutions included providing resources to
risky Internet businesses and negotiating on behalf of local academic institutions, civil society
and the private sector to secure initial connectivity. At that juncture, major multilateral and
bilateral institutions focused on the development of information and communications
infrastructure. Soon after, telecomm sector reform become a distinct area of attention of bilateral
and multilateral institutions who played a key role in altering the balance of power between
government, civil society, academics and the private sector by bringing new critical negotiating


21
   Through the leadership of ITU, the UN intends to hold two World Summits on Information Society to advance
the discussion of the digital divide at highest policy maker’s levels. See http://www.itu.int/wsis/


                                                      15
issues like privatisation to the table and stimulating negotiations by introducing new concepts
through workshop and conferences, technology demonstration, and through research.


International Financial Institutions were often the source of most of the tension surrounding the
negotiations. In addition to negotiating privatisation, competition and regulation, the IFIs were
able to convince governments to balance risks between being excluded from the global
information society and being overwhelmed by new technology. In other words, they forced
states to think about the risks between liberalization of the telecommunication sector and
clinging to the status quo. They persuaded policy makers to balance investment in ICTs with
attention to problems such as health, education and food security. International institutions were
key in helping governments to reflect on the potential impact of ICTs on their people and at the
same time to accept their “market” and corporate agendas.


There were four distinct phases of interventions by international cooperation actors to promote
Internet diffusion in Africa.22 Prior to 1993, the focus of the international actors was
infrastructure development and building the capacities of institutions in decision-making. The
second phase took place between 1993 and 1995 when Internet connectivity and
telecommunication sector reforms were the centre of dialogue. The years 1996-2000 constitute
the third phase in which competition and support to the private sector became the focus of
international cooperation. The fourth phase began at the end of 2000 with increased convergence
of Internet and telecommunication issues and global attention to the “digital divide.”




Early Developments
Prior to 1990 there was very limited electronic networking in Africa. The interventions of
bilateral and multilateral institutions were in technology transfer and expanding ICT capacities of
public institutions to collect, store, process and disseminate information by installing mainframe
and minicomputers, and in providing support to national telecommunications infrastructure
development plans. The World Bank and the United Nations agencies including UNESCO,


22
 Hafkin, Nancy and Kate Wild , ICT in Africa: The Challenge to Donors in the Global Information Society, In
Rowing Upstream - http://www.piac.org/rowing_upstream/chapter5/full_chapter_5.html


                                                      16
UNIDO and UNDP and bilateral donors like USAID were among the institutions that funded IT
projects that accounted for over half of the national equipment and technical assistance in Africa
in the mid 1980s23.


At the same time, the United Nations Scientific and Cultural Organization (UNESCO) and the
International Development Research Centre (IDRC) promoted an International Information
System for the Development Sciences (DEVSIS) model that was built around centralized input,
centralized processing and a decentralized distribution system that naturally mirrored the
mainframe and mini-computer models of those days. In collaboration with the UNDP these
institutions helped to establish the Pan African Documentation and Information System (PADIS)
which aimed at developing an African central node with contributions from national and regional
institutions that would maintain their own databases and exchange information with the central
PADIS system24. The ubiquity of microcomputers at the end of the 1980s altered the concept of a
centralized cooperative information system and proved it unsustainable, thereby leading to the
quest for a more distributed approach.

A well-organized effort to support ICT needs in Africa by the international community began
with the introduction of low cost networking technologies at the end of 1989. By 1991, the
Coopération Française through its research arm Office de la Recherche Scientifique et Technique
Outre-Mer (ORSTOM) initiated its Réseau Intertropical d'Ordinateurs (RIO) project that created
links to Burkina Faso, Cameroon, Cote d’Ivoire, Madagascar, Mali, Niger and Senegal. RIO
nodes were originally set up to provide an electronic communications network among ORSTOM
researchers. In 1992, the network opened to anyone involved in academic, research and
development work. The network grew substantially with nodes established in twelve French-
speaking African countries that served about 500 users in 60 organizations. RIO was able to
connect outlying countries like Madagascar and the Republic of Congo and build one of the few
resources of TCP/IP and UNIX expertise in Africa that later became instrumental in extending
full Internet connectivity to the rest of the continent. The project was phased out in 1998


23
  Odedra Straub, Mayuri, Is Information Technology Really Transferred to Africa? http://www.straub-
odedra.de/Artikel/27%20-is%20infromation%20technology.pdf
24
     Hafkin & Wild, ibid.


                                                      17
following extensive competition from local Internet Service Providers and the availability of
local and international resources to run more integrated campus-wide, university-based networks.

The International Development Research Centre (IDRC), a public corporation of the Canadian
government, was another institution that led ICT initiatives during these early years. After
piloting five separate projects in 1992,25 IDRC funded a Capacity Building for Electronic
Networking in Africa project with an aim to connect 24 African countries. IDRC and the
Swedish international cooperation agency SAREC also played a supporting role in building ICT
capacity at universities and scientific institutions in Africa. IDRC was also a pioneer in other
areas such as using ICT in natural resources management and in the provision of health care, and
forged close links with non-governmental organizations such as the Association for Progressive
Communications networks26.


Both the IDRC and RIO projects were pre-Internet and used low-cost Fidonet and UUCP store-
and-forward technology. A turning point in Internet development came in 1992, when
UNESCO’s Intergovernmental Informatics Program (IIP) launched the Regional Informatics
Network for Africa (RINAF). RINAF played a significant role in disseminating the concept of
the Internet protocol by forging links with the Internet Society30 that later emerged as a key
advocate to Internet diffusion in Africa. The project, a collaboration of the Network Start Up
Resource Centre (NSRC)31 based in Oregon, USA and coordinated by Internet pioneers Randy
Bush and Steve Huter, and the Internet Society, was instrumental in introducing the vanguard
African ISP managers to Internet protocol (IP) concepts.

The UNDP was another agency that initiated two ICT projects around the same time. The
Sustainable Development Networking Programme (SDNP)32 was launched in 1992 which aimed

25
    The five IDRC projects were: 1. NGONET - linked Non-Governmental Organizations, 2. ESANET – to connect
universities in east Africa including Kenya, Uganda, Tanzania and Zimbabwe, 3. ARSONET – to connect regional
standards organizations, 4. HEALTHNET - to connect medical practitioners and 5. PADISNET – for connecting
national and regional information centers that were part of the Pan African Development Information System at that
time
26
   SangoNet, GreenNet and the Institute for Global Communications were among the key networks of the
Association for Progressive Communication that promoted early connectivity in Africa
30
   Evaluation of RINAF project by Mike Jensen available at
http://unesdoc.unesco.org/images/0011/001137/113766eo.pdf
31
   http://www.nsrc.org
32
   http://www.sdnp.org/


                                                        18
to promote connectivity between users and suppliers of information related to the environment
and sustainable development in order to support the implementation of the Rio Declaration on
Environment and Development. Another project, the Small Islands Developing States Network
(SIDSNet)33 was created in 1994 to examine the feasibility of establishing an electronic network
for assisting the social and economic development of small island nations such as Cape Verde,
the Comoros, Mauritius, Sao Tome & Principe and the Seychelles. The work of these projects
provided an impetus for the entry of small ISPs into the market.

1993-1996

In addition to the rise of Internet literacy through these initiatives, there were other forces driving
privatisation, deregulation, and competition in the early 1990s. The IFIs were pushing for
telecommunication sector reform as part of their promotion of general economic reform in
Africa. Negotiations by the ITU and the IFIs, the groundswell of grassroots initiatives, and
increasing realization of the impact of the Internet on social and economic development led to a
shift from piecemeal adaptation of information technology to putting the Internet on regional and
national agendas by the mid-1990s.

Top on the agenda of the World Bank in this period was attracting capital investment to improve
poor telecommunications infrastructure in Africa and to privatize the sector. The widespread
state-owned, publicly-operated model was not able to manage resources efficiently or attract
investment and expertise from the private sector. The push for private investment worked, and
between 1995 and 1997, ten private investments in incumbent monopolies were achieved.

At the regional level, there was an interest in infrastructure building using the new cable and
satellite schemes that promised higher capacity and lower costs for international telephone calls
and better access to Internet with high quality transmission bandwidth. Although the sparse
population in many parts of Africa favored satellite systems, it was believed that fiber optics
could bring higher capacity and lower costs for international transmission. The increasing
demand for cost-effective bandwidth made optical fiber cables the cheapest and most reliable
alternatives particularly to the costal countries in Africa.

33
     http://www.sidsnet.org/



                                                  19
Africa One was one initiative to create regional infrastructure that gained regional support. It was
originally conceived by the ITU and promoted by AT&T to provide telecommunications
connections between African countries and between Africa and the rest of the world by building
a 39,000 Kms ring around the continent. Africa One was on the agenda of negotiations and
discussions of most telecommunications conferences of the time, and thirty-five African
countries signed Memorandums of Understanding supporting Africa One by 199734. Although
Africa One did not, in the end, materialize partly because of its failure to attract the necessary
$1.3 billion in investment, it did provided another incentive for international cooperation actors
to promote infrastructure building as a pretext for privatization and competition.



1996- 2000

The second half of the 1990s was marked by an increase in international cooperation in ICT
projects and a significant growth in economic and political reform in Africa that led to greater
Internet diffusion. Political reforms in the form of multi-party elections, new constitutions and
legalization of political activities took root in many countries opening up opportunities for civil
society intervention in ICT policies. All countries achieved Internet connectivity at this stage
(see Box II. The Internet Milestones) while the number of Internet users grew dramatically and
bandwidth increased.

Countries like Botswana, Mauritius, Morocco that made significant progress in reforming their
economies recorded extensive connectivity. Others like Benin, Burkina Faso, Ghana and Uganda
managed to broaden their Internet connectivity. By 1998 Internet growth reached its peak and the
role of the private sector gained widespread recognition. By 2000, close to 40 percent of African
countries were planning to privatise their incumbent telecommunication operators. The launch of
the African Information Society Initiative35 by the Economic Commission for Africa and the
Information Society for Development Conference (ISAD) in May 1996 in South Africa


34
   . InfoDev, Briefing Report on Cable and Satellite Projects.
http://www.infodev.org/projects/internet/220bmp/gca_e.pdf
35
   http://www.uneca.org/aisi



                                                         20
heightened the need for political legitimacy for Africa to secure a place in the global information
economy. The ECA played a key role in advancing the idea of national information and
communication plans throughout Africa.

                                                          The World Bank, ITU, USAID, and
      BOX II - Internet Access Milestones
      1992- Internet access in South Africa (1 country)   IDRC were among the key players
      1994 – Algeria, Egypt, South Africa, Tunisia and
      Zambia (5 countries)                                during this phase. USAID funded a
      1996 – Algeria, Angola, Central African             regional telecommunication
      Republic, Benin, Cote d'Ivoire, Djibouti,
      Egypt, Ghana, Kenya, Madagascar,                    restructuring programme in Southern
      Mauritius, Morocco, Mozambique, Namibia,
      Reunion, Senegal, Swaziland, Tanzania,              Africa and launched the Leland Initiative
      Tunisia, Uganda, Zambia,                            in 1996 with a focus on the creation of
      Zimbabwe (22 countries)
      1998- all countries except, Eritrea, Libya, and     an enabling policy environment,
      Somalia
      2000- all countries
                                                          strengthening the ICT infrastructure, and
      Source: Mike Jensen, http://www3.wn.apc.org         using the Internet for development. The
                                                          World Bank and ITU, besides funding
pilot ICT projects and promoting infrastructure development, continued their pressure on states
to open up competition in the telecommunication sector.

The World Bank initiated an InfoDev program in 1996 through funding from a consortium of
donors. InfoDev funded a number of projects in Africa including the African Virtual University,
a study on the Economics of the Internet, participation of African experts in various international
meetings, policy studies, data collection and publications. It also subsidized various ICT
applications project aimed at building a body of knowledge on the implications of the Internet
for social and economic development. The IDRC launched its ACACIA36 Initiative with a focus
on rolling out access to communities.

The process and availability of funding did unleash creativity in the delivery of Internet and
universal services. The establishment of telecenters and extending services to rural areas were
among the key concepts promoted by the international cooperation agencies. Other multilateral
and bilateral agencies began to include specific universal access to ICT as a performance
package in their credits and grants. The competition phase and the millennium ended with a

36
     http://www.idrc.ca/acacia


                                                     21
mixed bag of previously distinct telecommunications and Internet critical negotiation issues and
with a change of international actors’ language from “ICT for development” to “knowledge for
development” and “digital opportunities” without actually attaining full liberalization.



Beyond 2000


The fourth phase began in the new millennium with consolidation of the works of most of the
international actors who were operating in the previous phases. Following the plummeting of the
Nasdaq index, the African Internet market began to slow down as the bulk of the users who
could afford access had already obtained connectivity37. A significant area of focus during this
phase was improving the capacities of regulatory and civil society organizations to take over the
negotiations process promoted by international cooperation.


Organization of knowledge for development became an important concern during this phase. The
World Bank initiated the Global Development Gateway with the aim to create an “interactive site
for information on sustainable development and poverty reduction and a space for communities
to share experiences on development efforts.” The Development Gateway was funded by a
consortium of donors, but later included countries like Rwanda and Mali as Board Members. The
Development Gateway through the InfoDev programme provided resources for the creation of
Country Gateways in a number of African countries. The Gateways were aimed at facilitating the
innovative and effective use of the Internet and other ICTs at national levels. These and similar
initiatives by other agencies demonstrate the complexity of Internet negotiations that affect
issues such as the direction of the flow of knowledge.


The “digital divide,” long on the agenda of G8 member states, became important to new actors as
well. Multinational private sector foundations such as CISCO, Kellog, Markle and Hewlett
Packard, as well as new bilateral players such as DFID and IICD, emerged as important actors,




37
  Mike Jensen, The Internet Infrastructure, In Hamilton Paul, ed. The African Communications Infrastructure and
Services Report 2002/2003. AITEC Africa


                                                       22
both individually and in partnership with others39. New negotiation issues like VOIP, Internet
Exchange Point and Internet governance were on the agendas of these organizations.


The arrival of a multitude of institutions on the ICT negotiation scene created various alliances,
coalitions and factions. In part, the G8 Digital Opportunity Network brought significant cross
collaboration between international actors. The Markle Foundation, Accenture and UNDP
worked on a Digital Opportunity Initiative. UNDP and CISCO collaborated in the creation of
NetAid and CISCO Networking Academies that built significant human capacity on ICT in
Africa. In addition to the real accomplishments achieved, the consolidation phase also saw a
plethora of institutions and meetings that recycled wish lists aimed at bridging the “digital
divide” but realized little success.


In summary, the 1990s witnessed the ebb and flow of critical negotiation issues on the agendas
of international actors at different times. The debates throughout the decade by key institutions
such as the World Bank had significant bearing on the current state of affairs of Internet
diffusion in the region and on its future direction. Table 1 shows major bilateral and multilateral
institutions and the associated critical negotiation issues they advanced over time.




39
     Hafkin, Nancy and Kate Wild, ibid.


                                                 23
International     Pre-commercial         Commercial Competition                                  Consolidation
actor
Cooperation
Francise                              Connectivity & Access
RIO/ORSTOM


IDRC
                 Connectivity & Access
                                                                    Universal Access, ICT Policy, research




UNDP                                                                            Access, Pricing, ICT Policy




                       Infrastructure, privatisation, competition, regulation
World Bank




USAID
                                                               Infrastructure, pricing, regulation




Economic
                               Low cost connectivity,        National e-strategies
Commission for
Africa


DFID                                                                   VOIP/IXP/ICT Policy and Regulation



                  90     91     92       93   94        95   96      97    98        99    00     01     02   03




                                                   24
The following section analyses three critical negotiation issues that were advanced by the above
international cooperation institutions to shape Internet development in Africa during 1990s. A
brief national case is provided at the end of each phase to illustrate negotiations between
international institutions and local actors at different times.


      IV.    Critical Negotiation Issues


CNI #1 Negotiating for Healthnet Ground Stations
Frequencies license and high fees by monopoly telecom operators
Vs.
Low cost communication to health professionals using low earth orbit satellite

“At least three electronic mail nodes at the University of Zimbabwe are accessible to the public
sector, research community and non-governmental organizations in Zimbabwe… The first which
uses a UUCP link to the Internet, for electronic mail only, to Rhodes University in
Grahamstown, South Africa, has nearly 2000 registered users. The second is a node using Front
Door software and the Fidonet Protocol, as part of the Eastern and Southern Africa Network
(ESANET) project linking five universities in the sub-region, with about 30 users in Zimbabwe.
The third, a Healthnet/SatelLife ground station, is experiencing difficulties in securing an
operating license…” Prof. John G. Shepard. University of Zimbabwe, 1993

As the case of Zimbabwe illustrates, the negotiations for licensing a healthnet ground station,
low cost store-and forward links, and the first Internet connections characterized the early phase
of Internet development in Africa. Experiences in negotiating for installation of healthnet ground
stations were useful for subsequent wide-ranging debates on Internet access. In effect, the same
types of negotiations issues resurfaced a decade later with interest in the use of low cost Ku/Ka
band VSAT for Internet access to small businesses, homes and institutions. Essentially, this
analysis of early negotiations provides insights as to how low cost Internet access became
available later.
In 1991 SatelLife,44 an international NGO conceived by the organization International Physicians
for the Prevention of Nuclear War (IPPNW), launched Surrey Satellite Technology to facilitate
the sharing of health information among physicians and hospitals throughout the world and
primarily in Africa. IPPNW’s concern at that time was the lack of input from developing
44
  SatelLife was founded in 1988 by Dr. Bernard Lown, Professor Emeritus at Harvard University, as an effort to use
satellite technology to address some of the world’s health needs, particularly in developing countries.


                                                       25
countries on global debates about peace and health45. IPPNW’s strategy was to use packet radio
technology linked to a micro satellite via receiving and transmitting antennas to bypass the "bad
and costly telephones" barrier that prevented medical professionals in the south from
communicating with their counterparts in the north. Doctors in Africa that could not afford costly
telephone-based services would benefit from free email access via the low-cost, low-earth orbit
satellite connection.


In retrospect, SatelLife’s 46 venture to connect medical professionals in Africa was the first test
of the negotiations relationship between international actors and monopoly regimes in Africa..
Installation of a healthnet ground stations involved securing frequency licenses from the
monopoly telecoms, getting “sensitive” telecommunications equipment through customs, and
defining compensation fees for loss of revenue by incumbent telecom operators. Since SatelLife
operated on humanitarian grounds, the demands by telecommunications operators for licensing
and traffic compensation fees were very contentious.


Negotiations to install the ground stations involved a face-to-face meeting between Dr. Charles
Clement, SatelLife’s Executive Director, and African ministers of health who negotiated with
their colleagues at ministries of communications on SatelLife’s behalf. The intervention in
Uganda was relatively trouble-free following the personal involvement of Dr. Ruhakana
Rugunda, a former Berkley Student in Public Health and charismatic minister of health at the
time. Dr. Ruhakana who later became a SatelLife board member played a key role in lobbying
other countries and setting an example by installing one of the first heathnet sites in Uganda.


Mozambique, Tanzania and Zambia followed suit with some intense negotiations, sometimes
involving the intervention of SatelLife personnel, between their respective ministry of health
champions and local telecom companies. Indeed, this “associational power” used by SatelLife is
one of the negotiation instruments that was taken up by other international actors at later stages.
At the same time, the intervention of SatelLife personnel at times was necessary because local


45
   Julia, Royall, SatelLife- Linking Information and People: the last ten centimetres, Development in Practice,
Volume 8, No.1, 1998
46
   The Volunteers for International Technical Assistance (VITA) was using the same Low-Earth Orbit satellite and
was active in the licensing debate in some countries in Africa


                                                       26
health champions did not have the technical knowledge to negotiate with telecommunications
companies. One additional role SatelLife staff played was helping to increase the technical
knowledge and negotiating skills of their health ministry allies.


Though the humanitarian nature of SatelLife’s venture did result in shorter periods of
negotiations in some nations,47 the venture ran into difficulty in other countries including Kenya,
Zimbabwe and Ethiopia. In Kenya, the negotiation and “smuggling” of the equipment took place
through a personal physician of the former President48. In Zimbabwe, the negotiations over
licensing a ground station took two and a half years! The government of Zimbabwe was
concerned about the "free flow" of information to the general population. In Zambia, it was
illegal to own a modem that was not registered by the government, and those who tried to install
a third party modem were fined a hefty usage fee49. But, users found ways around the prohibition
by, for example, buying an internal modem and attaching a government registered modem to it.
When the telephone company came to check their lines, they would find only their own
registered modem attached 50. Coincidently, this “hide-and-seek” technique was one of the most
prevalent strategies used by Internet users throughout Africa to circumvent the laws and
regulations that inhibited Internet access.


In the end, SatelLife was able to set up ground stations in Botswana, Congo, Ethiopia, Eritrea,
Gambia, Ghana, Kenya, Malawi, Mozambique, Tanzania, Senegal, Zambia and Zimbabwe. But
the widespread utilization of Healthnet ground stations was finally abandoned due to variety of
reasons ranging from cost of equipment, need for skilled technicians to calibrate the system and
availability of other alternative connectivity options such as dialup Internet. SatelLife was able to
utilize the Internet for direct intervention in the area of health care and provided health care
providers with diverse tools that meet local needs accompanied by content.



47
 Mark Benett, Healthnet in Zambia: The Technical Implementation of a Communications System for Health
Workers http://www.sas.upenn.edu/African_Studies/Comp_Articles/HealthNet_Zambia.html


49
  see Karry Galivan’s account at http://www.hopkinsmedicine.org/ccp/conf/panel2.html
50
  Kerry Galivan, Field Study: Electronic Networking for Health in Zimbabwe,
http://www.sas.upenn.edu/African_Studies/Comp_Articles/Health_Net_Zimb.html



                                                      27
Case 1: Negotiating the Installation of SatelLife Ground Station in Ethiopia
At the time SatelLife was setting foot in the country, Ethiopia, population 65 million
and known for its draught, famine and civil war, was just emerging from a socialist
economic regime managed by a military junta that collapsed in 1991. The transitional
government that followed the collapse of the military regime created a constituent
assembly in June 1993 that approved a constitution in December 1994. The themes of
the new government and constitution were a federal system of governance along
ethnic lines and state ownership of the land. Ethiopians in Diaspora were disputing the
viability of state control of the land and federal system built along ethnic lines on
global electronic networks. Beyond the paranoia about the surge of opposition to
government ideals on global networks, the monopoly telecom company was
apprehensive about the loss of its lucrative revenue. The entry of SatelLife to the
restricted domain was greeted with suspicion.


Coincidentally, some connectivity work was underway when the new government
was sworn in. Store-forward connectivity had been provided since 1991 by the
Economic Commission for Africa’s Pan African Development Information System
under the auspices of UN. The new government soon became disquiet about the
PADIS store-and-forward mail service that was gaining popularity and “spreading
opposition information to locals.” It happened that some of the mail traffic carried by
the PADIS network included the discussions by the Diaspora. The incumbent operator
was also apprehensive about the loss of lucrative foreign currency from the NGOs and
UN agencies that were using the PADIS system. It was felt the PADIS system was
diverting traffic and compromised a substantial amount of the incumbent revenue.


The proposal for the installation of a healthnet ground station was then another “bone
in the neck” to the already wary operator. Despite the emphasis on the humanitarian
aspects of healthnet, SatelLife’s request for installation of a ground station was turned
down. Taking note of the complexity of the situation, SatelLife met with the dean of
the Faculty of Medicine at Addis Ababa Univeristy, a medical librarian and the
Ministry of Health and arranged for the creation of a task force that would negotiate



                                                 28
quietly for the installation of a ground station. The task force was soon established at
the Medical Faculty with members drawn from the faculty, the Ministry of Health and
the Economic Commission for Africa.


After several meetings, the task force wrote a letter formally requesting permission
for SatelLife to be licensed by the incumbent telecommunications operator. The
incumbent kept delaying the request, noting that it was still studying the technical
specifications. The process took well over a year of negotiating back and forth
between members of the task force and the incumbent. Finally, the license was
granted with a high traffic compensation fee. Although the task force argued that
medical doctors were not using telephones in using SatelLife, the incumbent insisted
that licensing and traffic compensation fees should be paid, and they were by
SatelLife.


The medical faculty was also required to pay customs taxes for the donated
equipment. This became more and more difficult for medical faculty because they did
not have the resources for the taxes. It was morally unacceptable to SatelLife to pay
duties on equipment donated for humanitarian purpose. SatelLife’s solution was to
import the equipment through United Nations Economic Commission for Africa
which had an agreement with the government regarding donated equipment. Once the
equipment arrived issues such as who would manage the network and who was to pay
the annual licensing fee arose.


Fortunately, the situation changed over time with the introduction of the Internet in
Ethiopia and with the realization that the traffic from the Healthnet ground station was
not as large as expected and therefore did not threaten the telcom’s revenue.


Interestingly, similar debates and discussions over Internet access continued in
Ethiopia thereafter, but negotiations were not held with the same motivation and
enthusiasm that those promoting the healthnet ground station brought to the table.
The success of the early negotiations proved the endurance of those who championed



                                                 29
using the Internet for a specific cause and provided the impetus needed to open
societal access to global knowledge..




CNI # 2 Privatisation
Selling off stated owned telecommunications service to attract private investment
capital and bring efficiency
Vs
Maintaining public ownership


The popularity of microcomputers and the Internet in mid 1990s led to an interest by
international actors in expanding public access to computers and telephones lines. Although the
diffusion of computers and software led to negotiations over lowering taxes, increasing budgets
to buy more computers for schools, and creating an enabling environment for private sector
participation in the delivery of computer services, most of the discussions, research papers and
conferences during this period were about privatisation of the telecommunications infrastructure
upon which Internet growth was based. International cooperation institutions argued that an
Internet-led economy was inconceivable without effective reforms in the telecom sector.


As a result, the mid 1990s marked the apex of a privatisation wave and the crumbling of state
telecommunications’ monopolies. The impetus for privatisation was driven by a neo-liberal
philosophy, dominant since the Latin American economic crisis of the 1980s, that promoted
principles of free trade, privatisation, deregulation and open competition. The “Washington
Consensus” that followed the Latin American economic crisis endorsed changes in policies in
favour of fiscal discipline, redirection of public expenditure and privatization of the telecom
sector. Starting with the privatization of the Compañía de Teléfonos de Chile in 1987 the Latin
American countries embraced telecom sector reform that resulted in increased income and
improvement of services. By 1995, Chile, Mexico, Argentina, Venezuela, and Peru had
privatised their state-owned companies following recommendations by the International




                                                 30
Financial Institutions that were part of their debt restructuring51. In effect, the approach to
privatization in Africa in the mid 1990s by the World Bank mirrors the successful ventures in
Latin America in early 1990s52.


At the time the Latin American countries were experiencing the pressure of the “Washington
Consensus,” their African counterparts were undergoing Structural Adjustment Programmes
(SAPs) that, among other things, demanded reforms in poorly managed telecommunications
companies. The International Financial Institutions urged their speedy privatization to increase
investment dollars, reduce overall economic fiscal deficits, improve incentives for technology
transfer, and bring in efficient management.


A number of other factors, both domestic and international, also supported international actors’
efforts at forcing privatization. On the international level there was significant enthusiasm during
the 1990s to improve trans-regional network capacities. In addition, the state-owned companies
lost their comparative advantage as countries increasingly entered the global marketplace. The
inclusion of enhanced telecommunications services within the Uruguay Round of the General
Agreement on Tariffs and Trade negotiations in 1994 put considerable pressure on countries to
commit to privatization. By 1996 Côte d’Ivoire, Ghana, Mauritius, Senegal and South Africa
committed to the WTO multilateral trade negotiations that paved the way for privatization of
their state owned enterprises.


On the domestic level, users became more sophisticated and demanded better, newer and cheaper
services from the telcoms as increased capital, management skills and technology became
available through the private sector. Governments also slowly began to realize the importance of
adequate infrastructure to the sector, while rapid technological advances and socio-economic
changes prompted integration and globalization of the sector.




51
  Huges, Robert, Privatisation and Modernization of Telecommunications in Latin America,
http://www1.appstate.edu/~stefanov/proceedings/hughes.htm

52
  O’Niell, Judith, Africa: The New Telecoms Frontier, International Telecommunications Review, A Euromoney
Publication, 1997


                                                      31
The International Financial Institutions (IFIs)53 and the International Telecommunications Union
(ITU) were the key negotiators of privatization with governments. Although ITU was a pioneer
in providing a privatization framework for negotiations, its legacy as the institution tied to state
monopolies proved conflictive with the privatization objective. The ITU utilized studies, policy
advice, and training to advance privatization goals rather than establishing rules for privatization
and compelling governments to alter the status quo. Although much of the its work in the
telecommunications sector was overtaken by the World Trade Organization as of 1997, the ITU
still plays a significant role in global negotiations. It provides a number of forums in which
policy makers, regulators, scholars and the private industry meet to discuss telecommunications
development, radio frequency management, and technical standards.


Negotiations on privatization, therefore, took place mainly between the IFIs that had
comprehensive loan and technical assistance packages54 and the states. During the 1990s, as
many as three quarters of World Bank loans or credits were conditional in part on privatization
of state owned enterprises. The World Bank used all the instruments at its disposal including
conditionalities, its knowledge base, and its allies at regional, sub-regional and national levels to
influence negotiations over privatization. They supported training of telecommunications
regulators at ITU training centers and at the United States Telecommunications Training
Institute. Through the InfoDev programme, the World Bank also created an independent forum
on regulation, the World Dialogue on Regulations for Networked Economies,55 to promote the
free flow of information. The IFIs also fed the demand for the Internet in civil society
organizations and government service organizations, by providing technical assistance,
equipment drops and loans. As the case of Uganda below demonstrates, the World Bank also
stopped lending to the telecommunications monopolies making it much more difficult and
expensive for African governments to raise investment funds for the monopolies, while at the
same time, it expanded its efforts to mobilize finance for privatized telecom operators.56


53
   USAID collaborated with the World Bank in the study on Infrastructure, Governance, Private Sector
Development, Public Sector Management in Africa to analyze experience with telecommunications reform in depth
and track changes over four years.
54
   Daly, John. The World Bank, Information and Communications Technology and Science and Technology
Strategy, http://www.geocities.com/researchtriangle/system/8616/ictstwb.html
55
   http://www.lirne.net/wdr/index.htm
56
   John Daly, Personal communication


                                                     32
A new breed of African leaders that showed readiness to engage with the IFIs in fundamental
restructuring of their economies moved ahead with privatisation. Ghana, Mozambique, South
Africa, Tanzania, Uganda, and Zambia all launched ambitious privatisation programs in all
sectors. Senegal, Côte d'Ivoire, Gabon and Cameroon completed privatisation programs
involving the electricity, telecoms, water and banking sectors. Though privatization of some
telecoms took place as early as 197657,the majority of privatization negotiations took place in the
1990s. Between 1995 and 1997, six countries sold their national fixed lines for more than $17
billion59. One of the ground-breaking privatisations during this period was the sale of 30% of
Telkom South Africa to a consortium of Southwestern Bell of the United States and Telekom
Malaysia for $1.3 billion (table 2).60


Two main approaches were advanced by governments in negotiating with the IFIs. Many
governments, including Uganda, Ghana, Mauritius, Tanzania, Nigeria, Senegal, Zimbabwe and
Kenya, allowed private investment in low exposure areas such as cellular telephones and Internet
services but few allowed privatization of their fixed telecommunications infrastructure. Investors
were comfortable with this approach due to its limited commitment. The states were also at ease
because they did not have to give up fixed-line public property, and it made access to services
possible at least for those who can afford it. Over 30 countries allowed investment in mobile and
value added services by end of 1997.


However, progress towards privatization of the public telecommunication enterprises proved
rather contentious in some countries, particularly those that relied on the lucrative international
accounting settlement. Telecom infrastructure was seen not only as a cash cow, but was also
regarded as a tool for remaining in power. Some governments were against conceding this
lucrative sector to market forces. Others had high unemployment, underdeveloped capital
markets, inexperienced service professionals, and unstable political systems that were not
conducive to privatization. Still others lacked good negotiation experience with investors and

57
   In 1976, Djibouti, and in 1977, Chad, sold part of their operations to international companies. In 1989, Guinea
Bissau and Sao Tome and Principe each privatized 51% of their fixed line operations.
59
   African Recovery, April 2000, http://www.un.org/ecosocdev/geninfo/afrec/vol14no1/apr00.htm
60
   Brian Samuel, A new look at African Privatization,
http://www.ifc.org/ifc/publications/pubs/impact/impsm99/privatization/privatization.html



                                                         33
donors. Negotiations that mustered the highest level of political support succeeded while those
that lacked broad-based support failed.


Investors were also partly responsible for altering the process of negotiations and their outcomes
during the privatisation wave. Most investors sought assurance against expropriation,
bureaucratic hold-ups and restrictions that would affect their profitability. Their search for
credible and lucrative markets meant that once they secured stable countries for investment, their
interests in others waned.. Investors scrutinized the size and growth of a market, potential for
profits, infrastructure availability and partnership possibilities before committing resources. In
some cases privatisation took place mainly with actors with whom the countries had historical
(i.e. colonial) ties. All the privatization plans included exclusivity periods to enable investors to
recoup some of their resources before opening up the field up to competition. As soon as the
exclusivity periods ended, smaller, more nimble companies began to enter the market opening a
new age of competition.


In sum, the neo-liberal doctrine that surfaced in the 1970s followed by the structural adjustment
programmes advanced by the International Financial Institutions in the 1990s led to intense
negotiation between African states and IFIs over privatization of their telecommunications
infrastructure. This change in ownership and the alteration of the structure of property rights
have improved access and performance in the sector that in turn has led to a competitive
environment in value added markets such as cellular and Internet services. The privatization of
the sector has also had a significant influence on the move towards competition in value added
services and in attracting local and international private investment in the Internet market in
Africa.




                                                  34
Case 2. Negotiating Privatization of Telecommunication Services in Uganda


Uganda is a relatively small and landlocked country with population of about 20
million, close to 90% of whom live in rural areas. Uganda’s per capita GDP of $224
in 2001 was 100 time less than its former colonizer, the United Kingdom. After
independence from the British in 1962, Uganda suffered a series of bloody
dictatorships and civil war until Yowery Museveni took control in 1986. Initially,
Museveni’s government was unwilling to privatize state-owned industries, but high
inflation, economic problems, and pressure from the IFIs led to the adoption of a
market-led approach in 1990s. The privatisation process began with the return of
confiscated property to the Asian business community and was followed by
privatization of dozens of small-scale enterprises.


The privatization of telecommunications was not on the government’s agenda early in
the process because the government felt telephones were luxury items with limited
importance to development. Additionally, unlike in other African states, the
telecommunications sector was not bringing in lucrative revenue in Uganda. Before
1977, telecommunications service was provided collectively by the east African
community of Kenya, Tanzania and Uganda. In 197761, Uganda established its own
telcom, the Uganda Post and Telecommunications Corporation (UPTC). The UPTC
was not able to provide adequate services or collect adequate fees: infrastructure was
inadequate and concentrated in Kampala; there was a decline in subscribers in 199362;
UPTC was operating at a loss due to insufficient fee collection, inaccurate billing and
high outgoing traffic that led to high call termination fees to regional and international
operators; the company was accumulating foreign currency debts. In addition, there
were accusations of corrupt behavior and management paralysis. It was clear that
privatization was the only way forward to reduce the foreign debt and improve tax


61
   Econ One Research, Inc. Uganda Telecommunications
A Case Study in the Private Provision of Rural Infrastructure
http://rru.worldbank.org/Documents/Uganda%20Report%20(Final)%20(7-30-02).pdf
62
   Mary M. Shirley, F. F. Tusubira, Frew Gebreab and Luke Haggarty, Telecommunications Reform in Uganda,
http://econ.worldbank.org/files/15972_wps2864.pdf


                                                    35
revenues and services.


The negotiations over privatization began with the issuance of cellular license to
Celtel Uganda which started providing services in 1995 to customers located in the
urban corridors of Entebbe, Kampala and Jinja. Coincidently, the International
Finance Corporation (IFC) of the World Bank was one of the shareholders of Celtel.
Using conditionality, the World Bank negotiated using the IFC’s investment and
technical assistance to facilitate privatisation. This was consistent with the policy of
the IFIs to stop lending for unprofitable monopoly telecoms in Africa.


The entry of Celtel into the market was followed by an enactment of a national
Telecommunications Policy early in 1996 that unbundled UPTC into Uganda Post
Limited (UPL) and Uganda Telecommunications Limited (UTL). The government
then took steps toward implementing its new telecommunications sector policy by
promulgating the Communications Act that established the Uganda Communications
Commission (UCC) as the industry regulator and the Uganda Communications
Tribunal as the agency responsible for resolution of disputes within the industry. The
government also pressed for the privatization of the UTL and opening competition in
basic telephone services by licensing a second national operator.


Soon after issuance of the Act, the Government, led by its Privatization Unit and
advised by the World Bank, made a strategic decision to bring in a Second National
Operator (SNO) before privatizing the UTL. An international competitive tender for
the SNO license was completed at the end of 1997 and the winner, Mobile Telephone
Networks (MTN) Uganda Limited, received a license for fixed, mobile, long distance
and Internet services63 in April 1998 and began operating six months later. MTN first
focused on the mobile market. Within two years its customer base exceeded UTL’s
fixed line capacity and it overtook Celtel by a wide margin.


Privatization of UTL was delayed due to legal and operational problems. The World

63
     ITU, http://www.itu.int/ITU-D/ict/cs/uganda/material/uganda.pdf


                                                         36
Bank’s IFC sent advisors to support the government to unlock the gridlocks, but the
government did not at first want to swap a state monopoly for a private corporation.
Yet, the refusal of the IFIs to invest in UTL, UTL’s bad financial performance, and
lessons from implementation of the communications act provided an impetus to move
forward with the privatization. The World Bank switched from enabling UTL by
providing it with extra loans to encouraging its privatization.


The actual work for privatization of UTL began in 1998 with pre-qualification of four
bidders. However, three of the four bidders dropped out for their own reasons and the
bid of the final company, Malaysia Telecom, was not accepted by the government.
Another attempt at bidding had no better success, and it was not until 1999 that the
process ended with the sale of a 51% share of the UTL to a consortium of Detecon of
Germany, Telecel International of Switzerland, and Orascom of Egypt.


Interestingly, while the Uganda Communications Commission was formally
recognized as the industry regulator throughout the period, much of the discussion
between the World Bank experts and the bidders was spearheaded by a Privatization
Unit at the Ministry of Finance. The Unit was the key negotiator of the privatization
process due to its direct implementation of the overall economic reform package
mandated by the IFIs. In addition, the privatization unit had a more power than the
regulator that had been recently established and was just beginning to assert its
authority and establish its credibility. The Unit was also determined to seize all
opportunities to advance the cause of privatization and competition as stipulated in the
economic reform package64.


The privatization process of the telecommunications sector has been a success in
Uganda. The telecommunications industry in Uganda has seen a substantial
transformation and the Internet market expanded markedly. For example, the Uganda
Communication Commission issued eight ISP licenses in 1997; the number of drop-in
Internet and email-centers and cyber cafes has greatly expanded; and infrastructure

64
     One Research, Inc, ibid.


                                                 37
roll out in rural areas through rural development funds has expanded the options for
people outside of Kampala to secure Internet access.




CNI # 3 – Competition
Cost-based Pricing
Vs
Service Usage Pricing


The entry of small and nimble Internet service providers, made possible by the move towards
privatisation, drove competition home in Africa in the late 1990s. The increase from a mere 84
ISPs67 in 1996 to 450 in 2000 demonstrated that the telecom market was becoming vibrant and
competitive. Other areas of intense competition were in value added services markets such as
cell phones and paging.


One of the greatest obstacles to ISP expansion and survival was the cost structure of
telecommunications. The cost of telephone charges constituted the major expense for ISPs which
they had to pass on to those who wanted Internet access. A survey carried out by the World Bank
in 1997 showed that telephone charges represented 58% of local Internet access cost to users and
86% of the cost when users accessed an ISP from outside a local calling area. ISPs were paying
over 48% of their revenues for Internet backbone connectivity and international leased lines68.
The ISPs wanted an immediate reduction in call charges to stimulate higher Internet usage.
Telecommunications operators, on the other hand, felt threatened by the impact lower access
costs of the Internet would have on their revenue streams.
As early as 1990, the developed world was experiencing a dramatic surge of Internet access
through the adoption of various tariff structures such as flat charges levied together with line
rentals and differential charges for businesses and public use. The difference between the cost of
67
   Mike Jensen, Internet Update for ISOC Geneva's DEVSIG Meeting, http://www-
sul.stanford.edu/depts/ssrg/africa/24connec.html
68
   InfoDev, Economic Internet Toolkit for African Policy Makers,
http://www.infodev.org/projects/internet/010toolkit/afpt1.pdf



                                                    38
Internet access in the OECD countries and African states was of great concern to international
development agencies. The revision of Internet access tariffs in Africa to stimulate its growth
became a question of debate at international conferences. Telecommunications operators were
also under the gun by demands from the United States’ Federal Communications Commission to
revise their accounting rates and to stop the proliferation of techniques that bypassed the
accounting rate regime including Internet telephony and call.


The monopoly operators were intolerant of pressure from all sides for reforms of their pricing
structures. Internet calls had a higher holding time on the telephone lines than simple calls, and
this resulted in added pressure on their poorly maintained infrastructure. Reduction of costs for
Internet usage would have meant they received less revenue for a service that increasingly
choked their lines. Some operators also charged that Internet usage had already blocked-out their
lucrative long distance calls market, and they were concerned that cheaper dialup access would
lead to the use of Internet telephony that would further reduce their revenue streams.


The tension between telecommunications operators that favoured user-based tariffs and
international actors that preferred cost-based tariffs represents a critical point of negotiation that
gained momentum during the second half of the 1990s. ISPs and international agencies were
unwavering in their calls for price restructuring based on market demand and contended that the
impact of the Internet on social and economic development could not be realized without
increased competition and a reduction of costs. The telecoms continued to favour a pricing
structure set by the monopoly in accordance with national economic policy and political.


In June 1996, USAID launched a project called the “Leland Initiative” in honor of the late
Mickey Leland, a congressman who died in 1989 in plane crash while on a famine relief mission
in Ethiopia. The goals of the Leland Initiative were to encourage states to adopt Internet friendly
policies in exchange for assistance in the form of equipment and training. In effect, the Leland
Initiative was an important venture that moved the negotiation on cost-based tariffs forward. The
launching of the Initiative took place at a meeting of African Communications Ministers
organized by Africa Communications Magazine at George Mason University in Virginia. Indeed,
the project was a blow to most of the 25 African ministers in attendance because they were



                                                  39
responsible for their respective state-owned telecommunications companies. The Leland
Initiative insisted that its grants were conditional on an agreement to adopt cost-based pricing,
liberalization of the market to third-party Internet Service Providers, and adoption of policies that
allow for the unrestricted flow of information. In a testimony to congress in 2001, Lane Smith,
the Manager of the Leland Initiative recalls …


          “…at the launch we established one important principle… We were only
          willing to help those countries that wanted to adopt modern, Internet-
          "friendly" policies. We offered to help them reach out to the private sector
          to implement these policies, and we offered to provide them with the
          equipment necessary to establish their national Internet infrastructure, and
          the training on how to use it. We noted that we would not help those who
          insisted on doing business the old-fashioned, state monopoly way.69”


The Leland Initiative had three major strategic objectives subsumed in its motto “Policy, Pipes
and People.” Strategic Objective 1 focused on fostering an enabling policy environment with a
cost-based tariff structure to stimulate the participation of the private sector. These goals were
negotiated and implemented by the US State Department. Strategic Objective 2 focused on
introducing or enhancing full national Internet connectivity through the provision of requisite
technologies (National Operation Centre – NOC), the strengthening of private Internet Service
Providers, and stimulation of competition. The National Space and Aeronautics Administration
spearheaded this component. Strategic Objective 3 focused on achieving broad-based utilization
of the Internet and other information and communications technologies for sustainable
development. USAID led the effort to fulfil this Leland Initiative objective.


The project began with field visits to African countries to convince policy makers to agree to
these basic principles. John Mack, who represented the State Department,70 one of the key



69
    Lane Smith, Bridging the Information Technology Divide in Africa, testimony to House Committee on
International Relations subcommittee on Africa, May 2001,
http://usinfo.state.gov/topical/global/ecom/01151703.htm
70
   John, Mack, Personal Communications


                                                      40
negotiators that visited Eritrea, Ethiopia, Kenya, Madagascar, Mozambique in the first round of
negotiations in conjunction with NASA, recalls that


          “ the State Department/USAID did not want to get into broad sector
         liberalization issues such as privatisation, interconnection or universal
         access; we wanted to begin with a few critical success factors namely
         private sector involvement and cost based tariffing.”

The debates and dialogues between USAID and governments generally involved how to
abandon traditional international telephone pricing for cost-based affordable tariffing, how to
allow free and open access to information on the Internet, and how to set aside long-standing
monopoly practices in favour of private sector ISPs. Countries that accepted the principles
signed formal bilateral Memorandums of Understanding (MOUs) with USAID. The MOUs
contained guidelines and stipulated the obligations of each of the signatories. USAID offered
technical and financial assistance for the installation of VSAT terminals and user training as
incentives for changes in policies. The signing of an MOU was often followed by a technical and
operational appraisal by the Network Operation Center. The third Strategic Objective was then
addressed through a team of experts from the Academy for Educational Development who
assessed end user needs and developed individualized country implementation plans (CIPs) that
defined the nature of subsequent USAID support in each country.

In addition to face-to-face negotiations, USAID used other techniques to advance their position
such as training high-level policy makers to become knowledgeable about the impact of Internet
technology on everything from increasing skill levels to health and agriculture. It supported the
participation of experts in the US Telecommunications Training Institute, and these experts were
instrumental in facilitating negotiations at local levels. In some cases, the Leland Initiative did
use associational power to sway domestic policies. In Kenya, for example, the MOU was
secured through an alliance with a university network known as KENET. The minister of
education of Rwanda played a key role in adopting Leland Strategic Objectives in that country
despite a setback when a telecom manager decided to abandon competition after he received
Leland’s equipment.




                                                 41
Despite amazing success in most countries, the Leland Initiatives faced problems in some
nations. In Ethiopia, for example, the state-owned telephone monopoly did not agree to the
condition of cost-based tariffing. The state not only prevented the private sector from entry into
the telecommunications market but also rationed access to telecommunication services and
maintained extremely high prices for local and international calls. Where governments failed to
appreciate the link between increased usage of Internet and economic development, the
negotiations took some time or Leland diverted its attention to other countries. Gambia,
Mauritania, Namibia, Nigeria, and Swaziland, did not meet USAID’s conditions for assistance.
In Guinea-Bissau, the process took some time due to a change in government. The Initiative,
however, pressed ahead with countries that wanted to set aside monopolies and began to
deregulate their telcoms and allow in the private sector. Benin, Guinea, Guinea-Bissau, Côte
d’Ivoire, Eritrea, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mali, Mozambique, Rwanda,
Senegal, Uganda all benefited from the project.

The Leland Initiative was also instrumental in forging links with and inspiring other
international cooperation agencies to adopt its goals of competition, free flow of information and
cost-base tariffing. Two years after the launch of the Leland Initiative, the United Nations
Development Programme (UNDP) was engaged in a parallel initiative entitled Internet Initiative
for Africa (IIA) that adopted some of the strategies employed by USAID. IIA opted to assist the
countries that were left over by the Leland Initiative - Angola, Burkina Faso, Cape Verde, Chad,
Ethiopia, Ghana, Namibia and Swaziland. Although this initiative did engage African states in
policy dialogue, it did not stipulate policy reform as the condition for assistance. Rather, the
UNDP required mandatory cost-sharing whereby each country was obliged to contribute an
equal amount. This conditionality delayed most project implementations because the
governments failed to come up with the resources on time. In addition, the conditionality
restrained private sector initiatives by subsidizing monopoly telecommunications operators. Yet,
although governments were slow in contributing their 50%, they became more engaged in the
negotiations and were committed to the project which spent, on average, over $1 million per
country.

It is important to point out here that the World Bank also had an interest in cost-based tariffs.
Through the Information for Development (InfoDev) project and in collaboration with the


                                                  42
Economic Commission for Africa, the International Telecommunications Union (ITU), the
African Development Bank (AfDB), the Government of the Netherlands and major multinational
private actors, the World Bank held a regional conference on Global Connectivity in Africa in
June 1998.. The conference declared the need for “adjusting prices for domestic services to
reflect costs of provision,” opening up the telecommunication sector to more service providers,
and adopting a more commercial approach to finance investment in networks and improve the
effectiveness of regulation71. During the conference, the World Bank introduced an Economic
Internet Toolkit for African Policy Makers72 that addressed the pricing structures, monopoly
controls and licensing charges in Africa. However, the Bank did not push the agenda further, in
part because international cooperation actors’ attention was soon overtaken by other trends like
“knowledge for development” and the digital divide.


Country Case # 3. Negotiating Cost-Base Tariffs in Mali

Mali is a relatively large, French-speaking nation located in West Africa. It is a desert
country of 10 million people with limited natural or economic resources, and with
minimal infrastructure. Yet, because of its political stability, it enjoyed substantial
growth in the 1990s, and its per capita income is about $250 per year. The
Government of Mali implemented forward-looking policies that aimed at liberalizing
the economy and the political systems and expanding social services. This openness
of the government, especially by fomer president Alpha Oumar Konaré, and support
from policy makers were among the factors that influenced Internet development in
the country.



Konaré, a scholar who after stepping down from office became the first Secretary
General of the African Union, was a member of the Comité du Pilotage for the
University's networking efforts, and made a sizeable contribution to ICT promotion in
higher education and to using the Internet for development. His leadership was a key

71
    World Bank, Global Connectivity for Africa, Issues and Options, Conference Report,
http://www.bellanet.org/gkaims/documents/docs/global.pdf?ois=no
72
   InfoDev. Economic Internet Toolkit for African Policy Makers,
http://www.infodev.org/projects/internet/010toolkit/afprelim.pdf


                                                       43
factor contributing to the smooth negotiations with Leland Initiative staff.

Mali was, in fact, the first country to participate in the Leland Initiative. Discussion
between USAID and the government began in April 1996 and was coordinated by a
local team charged with a Special Objective for Information and Communications
(InfoComm). The initial discussion between the Leland Initiative staff and policy
makers in Mali was centered around establishing a national Internet gateway that
would provide links to private Internet Service Providers. Before the Leland Initiative
entered into negotiations with the government, only a handful of people had access to
email, mainly through RIO-ORSTOM, Malinet’s uucp-based store-and-forward
network run by Eric Stevance and a Fidonet system run by Madibo Tambura of the
Balanzan Institute.

Through establishing a high bandwidth point-to-point network that would allow them
to connect to the Internet and provide efficient Internet service, the Leland Initiative
supported the ISPs and encouraged Internet diffusion. Also on the negotiating table
was identification of the telecommunications rate structures that would promote
increased usage.73

The Memorandum of Understanding stipulated that:

     the incumbent Société de Télécommunications du Mali (SOTELMA), in
      collaboration with USAID experts, would design, install, and test a high-speed
      Internet gateway;
     the government would adopt cost-based tariffs and first-year incentive discounts,
      thereby establishing Internet tariffs that were among the lowest in Africa;
     the government would also establish a transparent process to bring the private
      sector into the Internet access business;


Jonathan Metzger, who was in charge of operations of the Leland Initiative, made
visits to Mali to carry out a review of SOTELMA’s Internet revenue to determine a

73
     Leland Initiative, MOU between Government of Mali and USAID, Unpublished


                                                      44
fair price that the ISPs could afford and that the incumbent could profit from.

Immediately after the installation of a fully functional international gateway and the
availability of bandwidth to service providers, other negotiable issues cropped up that
required renegotiation. Primarily, the local loop became unreliable for most of the
ISPs to provide better services to users. Bringing the ISPs and SOTELMA together,
the Leland Initiative negotiated for improving and digitising local exchanges,
installation of a redundant international link, implementation of a national call line,
and management of the ML domain and IP addresses.

The Leland Initiative also held a series of “training for trainers” workshops to
improve user capacity in using the Internet and to strengthen Internet training
capabilities of USAID staff and partner organizations. Leland also included wiring
universities and research centers in the packages of negotiations. George Sadwosky of
the Internet Society advised the University of Mali on how to strengthen its network
and establish a local Internet Society chapter.


Overall, the Leland Initiative in Mali was successful. ISPs began serving hundreds of
clients. Users in major cities other than Bamako were provided with access numbers
and were charged at local calls rate. The University of Mali’s various schools and
campuses got connected. SOTELMA not only revised tariffs, but was also able to
improve the local network and its international gateway to 2 Mbits in 2000. Mali
further hosted two significant ITC conferences Bamako in 2000/2002. Humble Mali
became one of the advocates of Internet development in Africa.


Consolidation (2000-2003)


The year 2000 saw a considerable shift in international cooperation and negotiation on issues of
information and communication technologies. The plummeting value of ICT stock, the humble
realization of a growing gap between those with Internet access and those wihtout, and
experiences in promoting competition and privatisation in the telecommunication sector
culminated in a refocusing of international actors from “ICT for development” to “knowledge for


                                                  45
development.” Major agencies including the World Bank launched their internal knowledge
management strategies and external assistance frameworks with regard to ICTs during this time.


Although restructuring and privatization took place quite successfully in most African countries,
the institutional capacities and sometimes independence of regulators lagged behind. This
restrained progress on liberalization in many subtle ways. New tools and technologies such as
Voice over IP emerged as contentious issues between the incumbent telecommunications
operators who lost revenue and the joyous average users who found a new cost effective tool for
their communications. Part of the negotiations therefore shifted to regulators and civil society. It
became increasingly apparent that the best vehicle for achieving universal access to voice-related
services is wireless technology. The maze of issues grew day by day – participation in global
ICT governance, creating local and regional Internet exchange points, transition from circuit-
switched to IP-based networks, defining broad-based national ICT strategies and regulating
wireless networks all became important.


The attention to the “digital divide” by the G8 countries marked a shift in International
cooperation from negotiating particular issues such as privatisation, to integrated programs that
addressed not only a single dimension of ICTs, but a whole assemblage of ICTs and related
applications. In the summer of 2000, the G8 singled out the “digital divide” as a key issue that
needed to be addressed in the context of a concerted global strategy during its Summit held in
Okinawa, Japan. One result of the Summit was the Okinawa Charter on Global Information
Society. A second outcome was the creation of the Digital Opportunity Task Force (DOT
Force). The Task Force included members from governments, the private sector, the sciences,
and civil society, and was housed at the World Bank.


As the G8 was discussing the digital divide in July 2000, the United Nations’ ECOSOC was also
debating the “digital divide”, based on the report of a panel of experts submitted by the Secretary
General.74 The ECOSOC meeting was followed by a Millennium Summit that called on the UN
“to play a leadership and catalytic role in helping to bridge the digital divide and accelerate


74
  Report of the meeting of the high-level panel of experts on information and communication technology (New
York, 17-20 April 2000). http://www.un.org/esa/coordination/ecosoc/advdoc02.htm.


                                                      46
development by harnessing the development potential of information and communication
technologies (ICTs)”. The UN too established a Special Task Force to provide overall leadership
“to formulate strategies for ICTs development and put them at the service of development for all
to forge a strategic partnership between the United Nations system, private industry and
financing trusts and foundations, donors, and countries.”


Despite duplication of efforts by the two task forces, most of the recommendations of the G8
Digital Opportunity Task Force were taken up by countries like Italy, the United Kingdom and
Canada. Canada launched the Connectivity in Africa project in 2002, Italy focused on electronic
government, while DFID resorted to a number of interconnected catalytic initiatives to promote
local negotiations between civil society, regulators, policy makers and the private sector to
advance Internet diffusion. The French Government launched a project called ADEN aimed at
lowering the cost of Internet access by introducing cost sharing, increasing the demand for
connectivity, effectively using international bandwidth, and promoting capacity building
exchanges between countries. The DOT Force, the UNICT Task Force and the World Economic
Forum were also effective in forging an international coalition of representatives from private
and public sectors and civil society. The International Telecommunications Union (ITU), the
World Bank, UNDP, and an increasing number of bilateral donors have also taken an integrated
approach to formulating IT strategies by incorporating ICTs in their country assistance
programmes.


These changes at the global level were also felt at institutional levels. The World Bank, on its
part, developed a strategy that focused both on building an investment climate and empowering
the poor. The World Bank Group’s ICT arm was restructured and created a new section known
as the Global Information and Communication Technology (GICT) division that brought
telecommunications units from the Bank’s various Groups and the InfoDev programme together.
The new structure was entrusted with all ICT activities - privatisation, liberalization, regulation
and convergence, universal access, and rural communication. The World Bank shifted from its
traditional focus on privatisation, to competition that emphasized fixed and mobile telephone
networks. The Bank stopped traditional loans and credits to monopoly telecommunications and
increasingly invested in infrastructure, human resources, ICT applications and broadening sector



                                                 47
reform through institutional capacity building75. Its country assistance strategies targeted
investing in infrastructure including the Internet, ISPs, incubators, content and e-commerce, and
their social applications.


From the African side, countries launched a new initiative known as the New Partnership for
African Development (NEPAD) - an ambitious program that aimed at establishing international
partnerships with developed countries in exchange for commitment by African governments to
prevent conflict, promote and protect democracy and human rights, restore and maintain
macroeconomic stability, extend education, technical training and health services, and promote
infrastructure development including ICTs..There has been substantial interest in the NEPAD
ICT debate by different institutions and countries but there is no consolidated African front to
advance Internet diffusion.


     V.     Conclusion: Lessons from over a Decade of Internet Negotiations


Over a decade of discourse about Internet development between international cooperation actors
and government policy makers, among governments and local actors (civil society, the private
sector, academics), and between regional and sub-regional institutions and states, concluded with
a fascinating sets of issues like the “digital divide” that made international cooperation
imperative. The upsurge in the number of international institutions that showed interest in using
ICTs for development in Africa and a shift from relatively distinct negotiation issues such as
privatisation and competition to more complex and interconnected problems and objectives
demonstrated that learning from the past to shape the future could be difficult.


Interestingly, more substantial Internet growth was recorded at the time when negotiations over
critical issues were straightforward than during the later stages when issues become more
diffused and complex. Early in Internet diffusion in Africa, there was an impressive rise in the
number of ISPs and users, but this dramatic rise levelled off once those who could afford access
got connected. Figures 2a and 2b show host and Internet dialup subscription trends in Africa


75
  World Bank, Information and Communication Technologies, A world Bank Group Strategy,
http://info.worldbank.org/ict/assets/docs/ExecSum.pdf


                                                   48
between 1995 and 2002. The figure illustrates a high growth rate at an early stage and flattening
out during the consolidation phase.


FIGURE 2A


                                    Host growth
  450000
                                                                                417929
  400000
  350000                                                               352176
                                                              318638
  300000
  250000
  200000
  150000                                           155362
                                             128537
  100000    27356                  103306
   50000                   49412
        0
            1995    1996    1997      1998     1999        2000   2001    2002




                                                      49
FIGURE 2B

                                              Subscriber growth

                           1840000
   Number of subscribers




                           1640000
                           1440000
                           1240000
                           1040000
                            840000
                            640000
                            440000
                            240000
                             40000
                                     1995   1996   1997   1998   1999    2000   2001   2002
                                                             Year


                                              Source: Mike Jensen


Will these trends likely continue? Should different negotiation instruments or institutional
configurations be adopted to stimulate further Internet growth? The figures and discussion above
suggest that the international cooperation is at a critical juncture in defining strategies that truly
stimulate Internet growth in Africa. Analysis of changes in negotiation instruments, critical
negotiation issues and institutional configurations could provide insights for the future of global
discourse on the relationship between the Internet and development.


     a. Negotiation Strategies


From negotiating licensing for the Healthnet ground station to promoting privatisation and
competition to supporting the use of the Internet for social and economic growth, the
international cooperation actors used their conditional, knowledge and association powers at
different times to influence different outcomes of ICT negotiations. Early in the process, the
main instrument for concession was association with local stakeholders such as academic
institutions or ministries of health. Alliances with local institutions were sufficient to influence
the first low cost technology connectivity or secure licensing.




                                                                    50
Later, IFIs used conditionality to successfully influence privatisation of the telecommunication
sector. The structural adjustment programs of the World Bank made loans and credits conditional
on policy changes. Both conditionality and forming alliances with local stakeholders were used
to negotiate over pricing and liberalization.


More recently there has been an increasing focus by international cooperation institutions to
improve the knowledge of local actors so that they may more directly influence the discourse on
local policy negotiations. Convincing developing country experts of their position through
support to policy research and dissemination of policy information has become a key negotiating
strategy. The focus today is on increasing the flow of knowledge that improves the global
discourse on the Internet’s role for social and economic development. On top of training,
dissemination of policy research, and funding connectivity, international institutions and donor
countries have also been effectively using multilateral negotiation schemes such as GATS and
TRIPS to put pressure on developing countries to adopt and implement enabling policies.


   b. Negotiation Complexity


Over time, there has been a significant transformation in substantive negotiation issues from
simple to complex and from distinct to unified and interconnected. Initial negotiations took place
over access and pricing, then more complex topics such as intellectual property rights, VOIP,
Internet exchange points, VSAT licensing, information society policies, e-strategies and ICT use
for social and economic development, made the negotiations process more interconnected and
required diverse strategies. The negotiations process became muddied as a multitude of distinct
agendas were subsumed under the broad discourse of digital opportunity, ICT governance and
knowledge for development.


The most important indicator of the future direction of negotiations related to Internet diffusion
is the change in the focus of international actors. At the end of the decade, the attention to the
digital divide made discussions about access to rural areas and broadband applications for
education, health and business more important. Traditional tools like radio and television also
gained new relevance. Policy interventions that create a well regulated, liberalised and



                                                 51
diversified telecommunications sector, Internet and broadcasting regimes, universal access and
applications to health and education are vital to the new focus on using ICTs for development.


Unfortunately, policy interventions that focus on broad issues are difficult to implement. Debates
and dialogues on “everything under the sun” do not often create the necessary impetus for
Internet development. Lessons from a decade of negotiations on national e-strategies show that
focus on a few concrete issues may well lead to more discernible outcomes than focus on a
diverse agenda. This does not mean that discussions on broad topics of ICT development are not
important. International cooperation actors need to focus on a few areas of impact while creating
platforms for the active participation of civil society in the discourse of relevant issues specific to
local settings. Likewise, increasing national innovation and building competencies at local levels
may help countries to deal with the vast array of subjects being discussed at global and regional
levels.


The ability to learn and adapt to changing economic and political circumstances at local levels is
most likely to determine the future of success of the Internet in Africa.76 This makes debates on
national innovations as important as policy research and changes. Unfortunately, neither the
International Financial Institutions nor the bilateral donors have in the past had an interest in
discussing national systems of innovations. International debates thus far have focused on the
hardware, technology and policies surrounding ICT diffusion but not on learning and innovation
in individual countries that might be equally important.


     c. Changes in Institutional Actors involved in Negotiations


The third and perhaps most significant consequence of a decade of dialogue between states and
bilateral and multilateral institutions was the shifting of institutional actors involved. Over the
years, there has been a considerable swing in policy negotiation from inclusive and state-led
international organizations such as the ITU to more economically oriented regimes like the
World Trade Organization and to multinational corporation-led forums such as the Global

76
  Wolfe, David, Globaliation, Information and Communication Technologies and Local and Regional Innovation
Systems, http://www.utoronto.ca/progris/pdf_files/Ictreginnov.pdf



                                                     52
Business Dialogue on Electronic Commerce and the World Economic Forum. Alliances between
international cooperation actors and states were replaced by a coalition between international
actors and regional economic groupings like the Southern African Development Community
(SADC).


There has also been substantial growth over the past five years of online and off-line forums that
discuss, debate and negotiate issues pertaining to Internet development. Forums such as the
World Dialogue on Regulations that support a free flow of ideas, disseminate research results,
and promote discussions that go beyond institutional interests have surfaced. Internet issues have
also moved from peripherals to mainstream, leading to various debates between different groups
within and across organizations. International actors are not only funding and negotiating critical
issues but also began to identify strategies on how to utilize the Internet within their work areas.
USAID, for example, promotes internal debate among its professional staff, between the
representatives of USAID, the State Department, Congress and other organizations on Internet
policies in Africa77. The World Bank’s country assistance strategies that establish the
concessions with governments pass through rigorous internal and external consultations before
they integrate ICTs.


In Africa, increasing interest in collective bargaining through initiatives like the New Partnership
for African Development (NEPAD) made a wide range of discussions possible. At the global
level, coalitions such as the Global Knowledge Partnership (GKP)78 and a number of small
groups of bilateral and multilateral institutions indicate that truly global interaction are
possible79. IFIs have also experimented with similar prototypes for consultation on poverty
reduction strategy papers at national levels, although these rarely included ICTs. Regional
initiatives such as the e-Africa Commission and the African Information Society Initiative have
also created ongoing online and off-line discussions. An on-line civic-mindedness has also
developed.



77
   John Daly, Donors and Negotiating the Internet in Africa, http://stconsultant.blogspot.com/2002_12-
01_stconsultant_archive.html
78
   www.globalknowledge.org
79
   www.bellanet.org


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Though these alliances and strategies are still in their early stages and cooperation between
actors are driven by different organizational motives, time frames, objectives, styles, cultures,
languages and stakeholders, these trends point to what future institutional alliances and strategies
might develop. Three different institutional arrangements are likely.


First, there is a possibility for a continuation of the one-way north/south discourse exemplified
by the WTO where the north dominates all debates ranging from trade in services to intellectual
property rights. In such a model, negotiations would continue to pit those who would argue for
cultural diversity and social inclusion and those interested mainly in liberalization and profit
maximisation. The WTO model would continue to put pressure on African countries to concede
to neo-liberal ideals. At the same time, there would be opportunities for debates that articulate
the concerns of African countries, though likely they would result in limited actions.


A second model is that there would be the proliferation of distributed transnational and national
alliances in which actors from public and private sectors, both international and domestic, and
from civil society work together to facilitate dialogue on Internet diffusion. There have already
been signs of the formation of such networks as exemplified by the Global Knowledge
Partnership. Part of this coalition will be grass-roots movements that have been building quietly
including hundreds and thousands of individual initiatives and “communities of practices” of
experts in organizations. However there does not seem to be a clear strategy for moving the
discussions and debates of these networks to implementation of new policies. Advancing
distributed networks from negotiation to coordination and implementation of specific Internet
issues will be fundamental to the future of Internet growth.


The third and perhaps obvious option would be organic growth of governance structures that
combine the flavor of distributed networks and the north/south divide without predetermined
configurations. Alliances and coalitions between different loosely organized networks could be
built in parallel with the promotion of compliance to international standards and regimes.


This chapter demonstrated that the development of the Internet in Africa was the result of a
decade of negotiation and ideological struggle between various actors: international cooperation



                                                 54
organizations, governments, private sector actors and civil society. The regime that emerged
began with relatively straightforward negotiation issues like access to satellite frequency, but
more recently has had to address more complicated issues as the debate moved from privatisation
to competition to the digital divide.


The future of Internet related negotiations by international actors in Africa may take one of a
number of paths. While the current debates indicate the possibility for distributed global
negotiations, the attention to hundreds of issues at the same time will likely stall rather than
advance Internet diffusion. Considerable work is still needed in analysing the possible regimes
that could lead to greater Internet growth. Much can be achieved by creating a community and
research front that discusses and debates policy choices that can influence Internet growth at
national and regional levels. Developing systematic knowledge on leadership, organizations,
policy choices and institutional learning is essential for building on a decade of experiences and
directing future negotiations and discourses that will stimulate Internet growth in Africa.




Annex I – Key actors in negotiating Internet Diffusion




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