AN OPTIMAL ERITREAN INTERNET:

How to do an Internet connection that is right for Eritreans.

August, 1998

Eritrea Technical Exchange, 
110 Clayton St., 
San Francisco, CA, 94117 
USA 
E-mail:  
 

CONTENTS:

Motivation: Is Internet good for Eritrea? and why have it?
Background: Email in Eritrea
Questions of Equality
Analysis of Ethiopias Internet Problems
International Internet Connections: How do they work?
Market Analysis: Who can pay how much, for what?
Cost Analysis: What are the expenses?
Service Products: How do we satisfy everyone at once, and pay the bills?
Theoretical Market Dynamics:  How the system adapts to changing demands
Implementation Issues: What can go wrong?
Conclusions
 

Motivation: Is Internet good for Eritrea? and why have it?

In order to properly bring Internet connectivity to Eritrea it is necessary to first be clear on the reasons for Internet connectivity and services. .

For many Internet users there is no question that the Internet is a good thing.  It is not even a debateable issue for them. The average information addicted netizen, will say "Of course the Internet is good for Eritrea...It brings information, and information is power and money...which Eritrea needs!" While for many in Eritrea the question seems irrelevant: 95% of Eritreans have no computer access, and even if they had computer access they may never afford Internet access. So who cares?

The assumption of this analysis, is that there are three requirements which if met, will make Internet services feasible and highly desireable in Eritrea. The first is that it is a good investment and it makes money for Eritrea. If it makes money for Eritrea without any subsidy, then it is contributing to Eritrea's economic growth and development. The second requirement is that it be accessible to almost any Eritrean with access to a computer and a modem no matter what their economic level. The third requirement for Internet in Eritrea is that is trikes an optimal balance between price and performance for the average user--delivering reasonably good service at a low price if possible. We assume that if these three requirements are met, then everyone agrees that Internet connectivity is good for Eritrea.

(There are other concerns like people accessing objectionable or pornographic content. These problems are very easy to solve technically by setting access restrictions at the international connection. Policy is more of the question with those issues)

We of the Eritrea Technical Exchange (a non-profit support project in California, USA), wish to present for Eritrea and Eritreans, a detailed technical description and plan of how the Internet can be brought to Eritrea in a way that will completely fulfill the three requirements and resolve most questions and concerns about Internet access in Eritrea.

The main innovations of the plan that we develop are as follows:

    1. Optimized price/performance for different users by configuring different Internet access lines with different performance and cost features.
    2. Utilization of Internet service priority, caching, and mirroring in order to efficiently utilize the bandwidth of the international data connection.
    3. Creation of a service provision system that always provides high quality access (abiet at a price) and which also proivides extra income for system expansion before the system becomes clogged and congested.

Background: Email in Eritrea

The Eritrea technical exchange currently provides the best, most efficient, and cost effective email connectivity services for Eritrea. Even though, we utilize long distance phone calls which cost US$1.60 per minute, email is exchanged with Eritrea at an operational cost of less than three cents per page of text (retail prices in Eritrea are of course higher). This is a remarkable feat, especially considering that it costs nearly 100 times as much to send a 1-page fax from Eritrea to the U.S. The low cost and efficiency of Eritrea's email system has made it fairly accessible to a wide audience that includes hundreds of (perhaps over one thousand) users. These users include university students, private individuals, business people, and government officials (including the news and information agencies).

Our organizational model for such email development combines foreign volunteer technical support, and local commercial operation of the system by national businesses. A second component of the model, has been to use--at least initially--some margin from the commercial sale of email services to subsidize access for public or selected governmental institutions.

At first, there were doubts of whether or not email was good or even legal in Eritrea. But the success and efficiency of the email system in practice has resolved these doubts. Some of this involved showing people throughout the public sector that email was a good and useful service. This was done by providing people with free email accounts for a period so that they could see its benefits.

Questions of Equality

But in spite of its success, there remain valid concerns regarding the distribution and access to computer communications services in Eritrea. Very few people have email access. And Internet access may be much more expensive than simple email. It is not clear that the existence of Internet will benefit more than a very small group of rich foreigners, and large businesses. How can the Eritrean people benefit from such an expensive and high-tech undertaking?

Furthermore, Eritrea may take pause from Ethiopia's experience with Internet development. The service there was soon oversubscribed, and it has been plagued by slow performance, high cost, and low efficiency.

Analysis of Ethiopia's Internet Problems

Fundamentally, the problems experienced in Ethiopia are a reflection of the distortions in the local economy and the inequalities in people's incomes. The income disparity between the poorest sector of the user base (for example University students) and the richest sectors (foreign businesses) is a factor of one hundred. So an unhappy compromise must be made between cost and performance. This compromise satisfies almost nobody. The foreigners who are willing to pay more for good performance, can't get the performance they demand, because the average user can't pay that price. The average potential user my be willing access the system only at night, or with low priority, but they cannot afford access because the price is too high. So everybody pays a relatively high price for something with relatively poor performance. And the system is structured so that they have no other choice except make an expensive international phone call to an outside service provider.

The Ethiopian solution to the Internet access problem is far from optimal. The reason is that average price/performance is poor, and there is only a few price/performance options in an economically very diverse market. The solution is to increase the overall performance of the system (through efficiency improvements), and to provide a wide economic range of Internet use options for the local market. These solutions can and should be included in Eritrea's implementation of Internet.

International Internet Connections: How do they work?

Before we go into the details of how to make an Internet link work well, we need to review the basics of how such a link would work at all.

The Internet is a type of Wide Area Network or WAN. What a WAN does deliver packets of information or data to potentially distant computers over a wide range of interconnected computer networks. These networks may be of widely different types. But technical standards and rules have been developed for the delivery of such packets. These standards make the efficient operation of WAN's possible. The standard or protocol used on the Internet is called TCP/IP which stands for the Transmission Control Protocol/ Internet Protocol.

Computers can be either directly or indirectly connected to the Internet. Indirectly connected computers use an intermediary, or "proxy" computer to get data from the Internet on their behalf. Directly connected computers must have a unique IP (or Internet Protocol) address which is a series of four numbers, each between 0 and 255 noninclusive.

National Internet connections must have at a minimum two components. One is the local Internet Service Provider that provides the different servers and computers that the users use for calling in, storing and retrieving email, hosting web sites, etc. And the other is the Network Backbone Provider. This is the institution that provides the international data connection, and central network management.

For Eritrea, the international data connection will probably be a satellite line, probably a VSAT connection of some sort. An expensive VSAT connection of moderate capacity (256 kilobits/sec, which is equivalent about eight good quality phone lines), costs up to US$20,000 per month to rent. Probably more than half of this price is what the Eritrean phone company may charge to make its side of the connection.

In order to bring Internet to Eritrea, an Internet Service Provider (ISP) would have to be set up in Eritrea with the appropriate computers, servers, phone lines, modems, access servers, and network equipment. And then the ISP would connect its network to the VSAT link. The other end of the VSAT connection would go to an appropriate US, European or Asian ISP who would charge a fee of $500 to $1500 per month to connect the VSAT to its network and the Internet.

Once the ISP and the VSAT connection are in place, the Eritrean computer user would access the internet by making his computer call up the ISP's Internet access number. When the call is made, a connection would be established and the user could start getting or sending information. This would include receiving and sending email, and perhaps looking up the latest news, or looking up information at potentially a wide range of sites.

Different types of Internet use make very different demands on the network. Electronic mail (email) makes relatively few demands on the network. The data volumes are relatively small (about 5 Megabytes per day for Eritrea at the moment). And if it takes an hour or two for a message to be delivered, it is generally OK. It is easy for the network to provide slow data transfer for low volumes of data.

Meanwhile web-browsing can make significant demands on the network. And a single page of information may be 0.1 Megabytes or more. Furthermore most people will not want to wait for more than half a minute to minute for the information to be displayed on their screens. Only 50 people downloading one page each can conceivably require as much data transfer as the entire country's email system in one day. And each user may wish to have their data transfered at a rate of 2-3 kilobytes per second. This can make tremendous demands on a network which has a limited international connection.

For international web browsing over a limited international connection, one must have either very few users, or very slow data transfer (i.e. it may take several minutes for a page with a lot of graphics to be displayed). This is the fundamental delemma of Internet access in remote locations with limited telcommunications infrastructure.

Market Analysis: Who can pay how much, for what?

Our basic method in this analysis is to use capitalist market analysis methods to implement the Marxist axiomatic goal: "From each according to his ability (to pay for services) to each according to his need (for access to Internet services)."  While Marxism may historically have a lot of progandistic baggage associated with it, the idea that those who can pay more (perhaps for high quality) should pay more than the needy but poorer sections of the market is just basic fairness.

Eritrea's computer communications market is diverse. At one extreme are international business people who need to connect at the Internet at speeds which are only limited by the modem in their laptop. At the other end are poor students for whom 100 Nacfa (US$ 15) per month is a big expense.

For business people, their alternative is making an international phone call to Europe or the U.S. and connecting to a service provider there. Such a call would cost $2-$3 per minute originating from Eritrea and $1-$2 per minute originating from outside Eritrea. On such a connection, a user can obtain transfer speeds of 2-4 kilobytes/sec. Their main requirement of an Eritrean Internet service, would be U.S.-level service at a price that is cheaper than the alternative of making an international call to a foreign ISP.   If our target price is 1/4 the cost of an international dial-up connection, then  $0.25 to $0.50 per minute is a potentially acceptable price for top quality Internet access.

For the poor students, their main market demand is acceptable access at rock bottom prices.  They would probably want at least several hours of Internet use for their hard-earned 100 Nacfa. If we say this corresponds to a little over 20 minutes per day, then we have 750 minutes for $15, or $0.02 per minute of use. And if they get a few hundred pages of information per month, they will probably be pretty happy though.

Therefore, the 'ability to pay' for the different components of the Eritrean market varies by a factor by more than an order of magnitude. This is simply a reflection of the fact that per-capita incomes in Eritrea are less than 1/100-th what they are in the richer more developed countries. Ideally, an Eritrean Internet can satisfy the different demands of both expatriot and local users.

Cost Analysis: What are the expenses?

Capital cost, and amortization. With US$100,000 investment, 12% annual return + 3 year depreciation this is about $4,000 per month. If we can organize the system so that the cheapskate users have no significant marginal impact on the international bandwidth performance. And if we can get 300 paying cheapskate users, we can recover the capital costs of providing the access system for the cheapskates.

Bandwidth & operation: $20,000 per month (five times the capital cost). Here if we can get 40 businesses and business people to use the high performance connections for 40 minutes each day, then all of the bandwidth cost is paid for. In reality, we will have these two extremes, and a bunch of mid-performance connections in between.

The mid-range rate if it is to recover all fo the cost, must recover about $25,000 per month. Which for 500 users is $50/month. Anyone with such an account, if credited with 25 hours of access at $2.00 per hour. We could probably set a high-speed access class which has 5 times the mean transfer rate, and charge $10.00 per hour on those lines. Then we can set a low-cost access class at 1/5 the priority and 1/4 the cost at $10/month and $0.50 per hour of connect time. And we can set different classes in between.

Service Products: How do we satisfy everyone at once? and pay the bills?

To do this we need two things: (1) The system must be used at a reasonable level by mid-range customers, and (2) We have at least three tiers so that the customers can choose their use and cost levels.

Description of a three-tier performance system

The three tiers are low-cost, regular, and high performance. Where investment recovery is assured at the regular user level, and high returns are assured at the high performance level. The cheapskate tier is at first restricted by number of phone lines and number of accounts. (low-cost tier can eventually be as low as the cost of the phone connection) But as system utilization increases, all tiers become less restricted. Users then determine which service they use according to their dynamic perception of the value of each type of Internet access.

Theoretical Market Dynamics

How might people use a tiered system?
 

Implementation Issues: What can go wrong?

Many things can go wrong
 
 

Conclusions

Most recent update: 13 August, 1998 by rvb