Text: U.S. Lawmakers Review Internet Access in Africa

(Leland Initiative represents best American know-how)

The public-private partnerships established by the Leland Initiative -- which is bringing the Internet to sub-Saharan Africa -- represent the best of American "know-how" brought to bear on development challenges across the continent.

Lane Lee Smith, coordinator for the Leland Initiative at the U.S. Agency for International Development (USAID), made that point May 16 in testimony before the Subcommittee on Africa in the U.S. House of Representatives.

Smith was called to Capitol Hill to provide lawmakers with an update on the efforts of the Leland Initiative -- which was launched in June 1996 to help bring the information revolution to Africa through connection to the global Internet. The initiative is named after the late Mickey Leland, a Texas congressman who died in a plane crash while on a famine relief mission to Ethiopia in 1989. Throughout his career, Leland fought to bring the benefits of development to the people of Africa.

At the time of the initiative's launching, Smith said, only a "handful" of countries in Africa had the Internet, usually a slow and expensive e-mail service limited to the capital cities. "Only four years later, in November 2000, Leland Initiative experts established the national Internet gateway in Eritrea, the ninth country brought directly on line by the Leland Initiative, and the final African country to get Internet access," he noted.

"Seventeen countries have made substantial policy reforms with Leland Initiative assistance, more than 100 indigenous African firms have taken advantage of these reforms to go into business as Internet Service Providers, and up to 500,000 Africans in Leland countries are now connecting to the global Internet on a regular basis," he said.

Smith went on to recall several lessons that have been learned since the initiative was first launched:

-- Policy reform matters.

-- Good policies unleash the African private sector.

-- The Internet is an effective way to attract non-traditional partners -- such as the U.S. technology industry -- to development challenges in Africa.

Following is the text of Smith's testimony:

(begin text)

TESTIMONY

Lane Lee Smith Coordinator, Leland Initiative

U.S. Agency for International Development

"Bridging the Information Technology Divide in Africa"

Mr. Chairman and Members -- It is an honor to appear before you today and describe the activities of the USAID Leland Initiative. I thank you sincerely for the opportunity.

The Leland Initiative celebrates the life of Mickey Leland, a Texas Congressman who died in a plane crash while on a famine relief mission to Ethiopia in 1989. Throughout his career, Congressman Leland fought to bring the benefits of development to the people of Africa. The Leland Initiative was launched in June 1996 to help bring the information revolution to Africa through connection to the Internet, a fitting tribute to Congressman Leland's dedication and commitment to people everywhere.

Many words would describe what Congressman Leland accomplished, but none better than Courage and Vigor. These two words also characterize the leaders of the Leland Initiative partner countries in Africa.

Introduction

The Leland Initiative is a story of courageous African policymakers who saw it as an opportunity to do things differently and bring the benefits of the Internet to their people. It is also a story of a vigorous private sector -- both African and U.S. -- doing what the private sector does best, responding rapidly to the opportunities that these policies created, investing capital, establishing businesses, building infrastructure, and aggressively pursuing new business opportunities.

When the Leland Initiative was launched in June 1996, only a handful of countries in Africa had the Internet, usually a slow and expensive e-mail service limited to the capital cities. Only four years later, in November 2000, Leland Initiative experts established the national Internet gateway in Eritrea, the ninth country brought directly on line by the Leland Initiative, and the final African country to get Internet access. Seventeen countries have made substantial policy reforms with Leland Initiative assistance, more than 100 indigenous African firms have taken advantage of these reforms to go into business as Internet Service Providers, and up to five hundred thousand Africans in Leland countries are now connecting to the global Internet on a regular basis.

The public-private partnerships established by the Leland Initiative represent the best of American "know-how" brought to bear on development challenges in Africa.

What Leland Accomplished

The Leland Initiative was launched in June 1996, when USAID introduced the program to telecommunications ministers from twenty-five African countries at a conference at George Mason University. We described the three "P's" of the Leland Initiative, as follows:

Policies -- Helping African governments create an Internet-"friendly" policy environment, consisting of:

Low prices. Introduction of competition. The free flow of Information.

Pipes -- Providing state-of-the-art telecommunication equipment to bring the Internet to national capitals, extend it to under-served areas and secondary cities and support private sector Internet Service Providers as they deliver a wide range of retail Internet services;

People -- Helping individuals and institutions to apply the powerful information and communication tools of the Internet to achieve social and economic development and improve the lives of African citizens everywhere.

At this launch USAID 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.

Right away, ten African countries came forward, and the hard work began. Through a partnership with AT&T, USAID showed these first-round countries how to set affordable wholesale prices while still earning a 25% return on investment. These new prices averaged $2,000 per month for a wholesale circuit to an Internet Service Provider, while non-Leland countries were charging $10,000 or more for an equivalent level of service.

Working with a U.S. Internet Service Provider already doing business in Africa, the Leland Initiative helped national phone company officials view the private sector as a partner, rather than as an opponent to be controlled. We brokered meetings among the stakeholders, helping them hammer out transparent -- and minimal -- licensing procedures. In response to these offers, in each Leland country three, five, or as many as thirteen companies stepped forward, ready to invest an average of $40,000 each to get into this dynamic new business.

When these policies were in place, USAID turned to the U.S. technology sector, using firms in Utah, California, Virginia, Maryland and elsewhere to design modern satellite-based Internet gateways to bring efficient high speed Internet into the national phone companies. We introduced both wireline and wireless technologies to link these gateways to the new Internet Service Providers, and to give them telephone lines so customers could dial into them for Internet access. And we worked with the national phone companies to get the Internet outside the capital cities, installing U.S. technologies that link secondary cities into the national gateways.

The fruits of the Policies and Pipes are being harvested by the People side of the Leland, as the number of Internet users is growing rapidly in all Leland countries. For example, there are more than 8,000 subscribers each in Madagascar and Mozambique, 5,000 in Rwanda, 15,000 in Senegal and 40,000 in Kenya. While these numbers seem small in comparison with the industrial economies, the people are voting with their pocketbooks, paying $30 to $40 a month (a substantial amount in the African economy) for use of this tool. We estimate that three to five people make use of each subscriber account, or several hundred thousand in total.

Faced with the success of their neighbors and seeing the failure of their high prices and state and private monopolies, a number of countries returned to the Leland Initiative to ask for help in implementing policies that they had spurned a few years earlier. In Malawi, for example, when Leland helped the government open up the market, lower prices, and introduce more affordable technology, eleven firms came forward to request licenses. Today the Internet is booming in Malawi and phone company officials are rushing to quadruple the capacity of the national gateway.

People Level Impacts

Recognizing that it is not just access to the Internet that is important, but the uses that can be made of it, USAID embarked on a major effort to increase the capacity of African institutions -- government, business associations, NGOs, universities, and the like -- to use the Internet. We devised an approach that focused on the strategic use of information, rather than the technology, and trained more than 1,500 institutions in Africa in its use. We trained dozens of local trainers in the methodology, and they continue to use it across the continent.

We implemented a series of pilot projects to demonstrate new, Internet-based approaches to doing business in all sectors, many of them in support of U.S. Initiatives such as the Education for Development and Democracy Initiative. Some of the examples include:

Small Business Development

To address the development challenge of increasing household income for the rural poor, we created an e-commerce activity with Ugandan small businesses, using information technology to improve competitiveness and trade. The results were phenomenal. Within six months of receiving equipment and training, all companies had increased revenue streams (one by 60%), half the companies were able to find inputs through the Internet, reducing their operating expenses and increasing their competitiveness, and all but one of the companies had made business contracts outside Uganda.

Women's Business Network

To address the issues of women's access to information technology, we formed a partnership with Kodak to develop the Women's Business Network. With membership from Ghana, Kenya, Uganda, South Africa and the United States, the Women's Business Network promotes use of the Internet in developing trade relationships, expanding access to critical market information, and establishing e-business linkages between African and U.S. companies. Over 140 African businesswomen created their own, self-reliant U.S.-Africa Women's Business Alliance. Forty women have set up websites, or begun advertising their goods over existing sites. During a training session in Kenya a woman uploaded a picture of her jewelry on an existing trade forum, and received an order two days later.

Education

Leland is helping disparate universities in a number of countries to unite into national education networks, the fundamental building block of the rapidly globalizing education world. The Leland Initiative formed the Kenya Education Network (KENET), uniting twenty-one public and private universities spread across the country into a powerful advocacy and development group. In a unique public-private venture with the Kenya national phone company, U.S. technology will bring high speed Internet to all KENET locations country-wide, and to all surrounding users. Leland worked with the Kenyan policymakers to win Internet price reductions of $48,000 per KENET university, or more than $1 million per year.

Leland is helping similar national education networks to be built in Guinea, Mali, Rwanda, Uganda and South Africa.

In April 2001 in Uganda, a unique partnership comprised of USAID, AVAYA Corporation (a leading U.S. technology firm), Schools-on-Line (a U.S. NGO) and Hewlett-Packard inaugurated the Makerere University wireless Internet backbone, a state of the art network linking 18 campus buildings and the off-campus medical school. Today a Makerere student with a suitably equipped laptop can sit in a classroom or simply on a bench anywhere on the campus and access the Internet via wireless technology, something being introduced now on leading university campuses in the United States.

Telemedicine

The Leland Initiative is working with the Department of Emergency Medicine of Howard University Medical School to train emergency medical workers and provide on-line case consultations to the South Africa University of the Transkei via the Internet. In prior years this type of partnership depended on expensive staff exchanges and the mailing of videotapes.

Democracy and Governance

The free flow of information is the lifeblood of democracy. The Leland Initiative has formed Internet networks of democracy stakeholders focused on the executive, legislative and judicial branches -- the "checks and balances" institutions. Through these networks, stakeholders share lessons learned and new approaches for increasing citizen participation in policy formulation, democratic local governance and anti-corruption drives. Electoral commissions are being linked and voter registration is being computerized. National legislatures are using the Internet to do better research and interact with constituents. In the Democratic Republic of the Congo, USAID helped a democracy NGO to establish a cybercafe, which is busy from dawn to dusk.

Agricultural Production

In KwaZulu Natal Province in South Africa Leland Initiative experts helped the Black Farmers Union to set up Internet Information Centers, through which more than 1,200 farmers now access banking services on-line, saving themselves an 80 mile roundtrip. They also now get information on the price and availability of key agriculture inputs such as fertilizer in real time, rather than having to work through costly and inefficient middlemen.

Lessons Learned:

In addition to supporting major policy reforms, providing a dozen national Internet gateways, encouraging over 100 private Internet Service Providers, and helping hundreds of thousands of Africans to tap the Internet to accomplish development, what lessons have we learned from the Leland Initiative and its expenditure of taxpayers' dollars?

First, policy reform matters, and USAID has a comparative advantage in facilitating it. Policy reform has a high leverage value. By working with ten countries that wanted to set aside monopolies and deregulate almost immediately, major policy reforms were accomplished, bringing private sector investment, expertise and energy. And, by patiently waiting and providing assistance only after countries became convinced of the value of policy change, Leland was able to win adoption of major reforms. In Kenya, for example, Leland pricing reforms sent wholesale costs tumbling, saving Kenyan consumers more than $20 million per year in Internet access charges.

Second, good policies unleash the African private sector, just as they do in the United States. The private sector is using its own resources and expertise to bring the Internet to rural Uganda, Democratic Republic of Congo, Mozambique, Guinea and elsewhere, based on policy assistance and market development provided by the Leland Initiative. Small business cybercafes are springing up throughout the Leland countries in response to cheaper and more reliable wholesale Internet access. Entrepreneurs have recently paid $1.1 billion [thousand million] for national cellular licenses in Nigeria, and are now investing almost $500 million to build the infrastructure. The Leland Initiative is working with the Nigerian Communication Commission to strengthen its policy and regulatory capacity.

Third, the Internet is an effective way to attract non-traditional partners to the development challenges in Africa. The Makerere Wireless Backbone project noted above generated approximately $400,000 of contributions from the U.S. technology industry.

The Leland Initiative is teaming with Cisco Systems to establish the Cisco Networking Academies Program in nine Leland countries, through which hundreds of computer networking specialists will be trained each year. In this partnership, Cisco is providing approximately $1.2 million of equipment, a 540-hour training curriculum, access to a modem, Internet-based "Learning Engine" and training of trainers on how to use it.

Universities throughout the United States and Africa are now entering partnerships, facilitated by Leland Initiative technical assistance and technology. For example, a modest feasibility study and pilot project provided by the Leland Initiative enabled Tufts University to win a $240,000 grant from a major foundation to implement joint teaching and research in partnership with Makerere University and the University of Dar es Salaam. More than thirty such partnerships have been formed, using resources from a variety of development partners.

The Challenges Ahead

The partner countries of the Leland Initiative have shown the dramatic changes that can occur when courageous policymakers and a vigorous private sector work together to introduce new ways of empowering people and doing business.

In the next few years, the key policy challenge will arise in the regulatory arena, as technologies change and converge. More than thirty African governments are establishing telecommunications regulatory bodies, and most of them are asking for help to establish a pro-competitive regulatory environment, maintain a level playing field among all the private sector actors, large and small, and get services out to where the market does not reach. We estimate that approximately 3,000 regulatory officials in Africa will need to be trained in order to take on this challenge. We have recently begun working with the Telecommunications Regulatory Association of Southern Africa and Cisco Systems to deliver distance education courses based on Federal Communication Commission training modules. We are working today to form similar regulatory associations in Western and Eastern Africa, as a way of increasing skills, harmonizing regulatory approaches and promoting regional integration.

A second key challenge will be to build capacity within the major institutional users to employ the Internet and its tools for economic and social development. Distance education, telemedicine, e-government and e-commerce hold great promise for African and American interests alike. But, all of them require major increases in institutional capacity to adopt sound information strategies and then find the right technologies to make them work. The democracy networks noted above need to be expanded, to bring new countries into existing networks and facilitate networks of new types of stakeholders.

Closing

Mr. Chairman, thank you again for the opportunity to describe to your committee the achievements of our courageous and vigorous partners on the Leland Initiative. On behalf of the African policymakers, the private sector, and the Leland Initiative coordinators in USAID missions in Africa, it has been a true privilege to celebrate the life of Congressman Mickey Leland through this Initiative.