The recent decision by the Mubarak regime in Egypt to cut off all Internet access for its citizens is a textbook example of using a silver bullet to shoot oneself in the foot.

The whys and wherefores of how they’ve gone about doing so provide a useful opportunity to understand the paradox of control over the Internet and the costs involved when governments and other actors indulge their desire to dam the torrent of information that flows across their networks.

In order to do that, we need to dispel a rather pesky myth.

Perhaps the most dangerous misconception of the Internet is its survivability. It’s true that, as one information activist put it, the Internet treats censorship as damage and routes around it. But that statement is predicated on the actual presence of an Internet in the first place.

That may sound like a silly statement, but the Internet might not be as enduring as many assume it to be.

While many of the software and communications protocols that define the Internet are, by design, remarkably resistant to outside control, the physical networks through which our data passes are not nearly so robust.

James Cowie, a network analyst from Renesys Corporation, has written excellent analyses of state intervention in national communications both during the post-election strife in Iran and more recently in Egypt. Using forensic evidence gathered in real time, he constructs a vivid scenario: In contrast to Iranian authorities, who elected to use physical choke-points in the communications infrastructure to reduce the flow of information to a trickle, Egyptian authorities appear to have instructed all national Internet Service Providers simply to cut all communications with the outside world.

Starting at midnight (Egyptian time) on the 27th of January 2011, Egypt’s largest ISPs began disappearing from the Internet. Within a period of about 13 minutes, they simply stopped delivering data to and from their customers.

Cowie writes:

“[T]his sequencing looks like people getting phone calls, one at a time, telling them to take themselves off the air. Not an automated system that takes all providers down at once; instead, the incumbent leads and other providers follow meekly one by one until Egypt is silenced.”

How did this happen? Every large ISP participates in a cooperative system called the Border Gateway Protocol, or BGP. BGP allows them to discover how traffic destined to a remote network should be directed. Simply put, each ISP announces which address blocks it supports. These blocks can represent tens or even hundreds of thousands of individual machine addresses.

Designed for simpler times, BGP is a trust-based protocol. It relies implicitly of the good faith of all participants to continue working. This makes it remarkably vulnerable to the machinations of states or organisations whose interests don’t align with others’. Back in 2008, Pakistan Telecom caused a furore when, for a little over 2 hours, their bungled attempt to use BGP to block YouTube domestically resulted in the site disappearing from much of the Internet.

Just last year, a change to BGP traffic announcements resulted in about 15% of all Internet traffic being routed through networks in China for a brief period. This resulted in breathless speculation that the disruption was not accidental. Some claimed that it amounted to a reconnaissance in force, as it were, a probing of the global Internet to determine its resilience in the face of attack.

Intentional or not, these disruptions to the BGP apparatus make it abundantly clear that choke points exist on the Internet and that they are remarkably easy to subvert.

Debate continues to rage in technical circles about what can be done to mitigate BGP’s innate deficiencies. Changes will doubtless be necessary. But the liability wouldn’t be so grave if our physical communications networks weren’t so hopelessly centralised.

Egypt offers us a particularly vivid example of this. A country of over 80 million people, it has only a half a dozen or so large Internet providers. Only one of them, the Noor Group, initially resisted the demand to drop services. Some have speculated that its continued online presence was due to its extensive list of blue chip clients, including many banks and the Egyptian Stock Exchange.

Ultimately, though, it was a limited victory. Noor advertised only 83 of the roughly 3500 data routes in and out of Egypt. They were eventually forced off the air a week after their IT confrères.

In Iran, population 72 million, there are only 5 significant international links, all of which flow through a single Government-run office. Such centralisation makes it easy for the state to exert its influence.

(One European-owned company, Vodaphone, washed its hands of the decision to cut service to its Egyptian customers, claiming that the Mubarak regime had the legal right to issue the order. This rhetorical line apes the rationale provided by Nokia-Siemens when it was discovered that their equipment enabled Iranian authorities to block most traffic and eavesdrop on the rest.)

The Internet as a principle –that is, the idea of an open network allowing free communication regardless of source or sender– is not as popular as some might believe. It made its way into the commercial world more by stealth than by deliberation. Telcos didn’t really understand the Internet as a service; they just knew they had to offer it in order to compete.

One thing was clear to them: The sum of all services across a global network was clearly more valuable than those offered by a single provider. Equally attractive was the perception that these services came more or less for free with the connection.

But the seductive power of the Net hasn’t changed attitudes entirely.

Telecommunications companies, with a long legacy of market-controlling behaviour, still build and deploy their infrastructure using centralised models. Recently, some of them have begun lobbying for the right to exert control over the data that passes over their networks, potentially penalising services that compete with their own. Comcast, one of the largest ISPs in the US, recently got approval to acquire NBC Universal and its content-creation ecosystem, giving rise to fears that they might leverage their control over the information pipeline to dictate what passes through it.

Put simply, carriers would love nothing better than to go back to the telephone service model, where fees are based on where you are and who you talk to, with no conversation possible unless you’ve paid your toll.

The principle of an end-to-end network –that is, one that allows direct, unmediated connections between two parties– militates strongly in the opposite direction. Its appeal is remarkably seductive, leading most Internet users to view with displeasure the telcos’ (or governments’) desire to mediate communications.

Renesys quite rightly remarks that if cuts to Egypt’s Internet had lasted much longer, the reduction in commercial activity could have been catastrophic for the nation.

Furthermore, Cowie remarks, it wasn’t only Egypt’s pipelines that were at risk:

“[T]he majority of Internet connectivity between Europe and Asia actually passes through Egypt. The Gulf States, in particular, depend critically on the Egyptian fiber-optic corridor for their connectivity to world markets.

“Are the folks at Davos thinking about this? They should be.”

In a perfect world, consumer choice and basic business commonsense would always win. But the problem is that centralised networks not only cost a lot of money (placing their design and construction into the hands of the most powerful), they make a lot of money, too.

In monetary and political terms, the wealth of the network itself tends to pool rather than to flow.

A fundamental change has already overtaken the public’s perception about the value and nature of digital communications. Passive consumption of news through the television is considered passé, or at least diminished in relation to the sharing of photos, videos and words across the Internet.

As individual control over the flow of information rises, central control wanes. And this, obviously, is the crux of the dilemma facing businesses and governments across North Africa and throughout the world. They are belatedly coming to realise that they are fighting a many-headed hydra. As they cut off one avenue of communication, another rears its head.

But that hydra has a body, and the body is the network itself.

As this column goes to press, it appears that Egypt’s decision to cut off the Internet failed in every important regard. One protester is reported to have said, “F*** the internet! I have not seen it since Thursday and I am not missing it.… Go tell Mubarak that the people’s revolution does not need his damn internet!”

I would be amazed, however, if this fact led other governments to act differently, should they find themselves in a similar situation. Indeed, the US Congress is currently considering legislation that would provide the President with an ‘Internet Kill Switch’ for use in case of emergency.

Likewise, I see no evidence that the ultimate futility of attempting to control the flow of information will change attitudes in the board rooms and offices where our increasingly centralised networks are planned. For telcos, the challenge is merely technical.

For the Internet –as it was originally intended– to become fully realised and fully resistant to coercion, the devices and infrastructure through which our data travels will need to reflect the same principle of decentralisation as the software and protocols we use today. That implies the construction of communications devices that are very different from the locked-in, network-centric phones, tablets and computers we’re familiar with. I can think of no short-term scenario in which the development of such products will take place in any significant way.

For some time to come, we will continue to live in a world in which the powerful continue to load silver bullets and take aim squarely at their own feet.

The key to all this is his failure to distinguish between the network and the protocol. Manjoo says that the Internet helps Iran’s repressive efforts. That’s not true, at least not nearly to the extent he thinks. The network – the physical infrastructure of cables, switching and routing equipment, is what’s trapping people right now. If it weren’t for the end-to-end nature of the software protocols that make up what we conveniently call the Internet, little if any news at all would have emerged from Iran.

Manjoo points out the structural weakness in Iran’s communications systems well enough – they all have to pass through the single point of control. One of the first actions the government took following the announcement of the presidential vote results (widely considered to be false) was to severely limit access all but one of its international data connections.

Interestingly, this disruption was short-lived. Data is flowing across all official (and a few unofficial) paths to the outside world. Traffic volumes, however, are drastically reduced. James Cowie of Renesys Corp. asks the burning question: Why did the regime not cut access completely? He suggests three possible reasons:

1. The cynics. Perhaps the government has left the Internet intact so that they can use it to surveil and round up dissidents. Perhaps they even put bandwidth constraints in place to make it easier to cope with the volumes of traffic that need to be captured and filtered.
2. The optimists. Perhaps the government has realized that a modern economy relies on the Internet to such an extent that it cannot be turned off, for fear of disrupting financial transactions and business communications. Iran’s Internet ecosystem is relatively rich, and the impact on their economy of a sustained Internet shutdown would be significant. Why make it harder for companies to do business in Iran at a time when oil revenues are cratering and foreign investment is looking for reasons to take a walk?
3. The realists. Perhaps the government is too busy with other things to worry about the Internet. Governments aren’t well-suited to run the Internet, and they don’t completely understand how it works. The Internet has never been “turned off” before, and it would take creativity and thoughtful action to figure out who to ask in order to get it done. So it simply hasn’t happened, and probably won’t. Good thing, too, because they might not be able to turn it on again.

[emphasis mine]

I’m inclined to agree with Cowie in his suspicion that 3 is the most likely, although I’d guess that there are likely at least one or two more pragmatic (possibly enlightened or even passively subversive) technical managers who know the importance of keeping the trains running, even if they’re not all on time.

But as long as it continues to function, the Internet will allow private data to flow. Adhering to Mitch Kapor’s famous assertion that the Internet treats censorship as damage and routes around it, it’s reasonable to conclude that Iran’s Internet is terribly damaged, but continues to function.

So Manjoo’s conclusion is wrong. The Revolution may not be digitised, but it’s not because of the Internet; it’s in spite of it. The most effective anti-information measures taken to date by the ruling junta have been the arrest and arbitrary detention of citizen journalists and attacks by Basiji on anyone seen carrying electronic recording gear, even mobile phones.

The repression being experienced there is brutal and it’s being carried out largely by human beings.

That said, technological dangers do exist. The physical communications network in Iran is centralised by design and controlled by the state. Quelle surprise. If I were a well-funded and resourceful opposition member in Iran today, I’d be investing no small resources in the acquisition of state of the art VSAT and mesh-enabled equipment. Such technologies are much more difficult to control because their interconnection points are decentralised and distributed.

One example: It would be trivially easy to write firmware for the Apple iPhone that allowed mesh networking capabilities. Mesh network protocols are opportunistic, agnostic processes that appropriate and share Internet connectivity on an ad hoc basis. In layman’s terms, anyone with access to the Internet (say, via 3G or a wireless hotspot) can share it with anyone within a reasonable distance. The next person in line can also share that link, effectively extending the range and usefulness of even a nominal Internet connection.

In order to disrupt such a network, you’d have to hunt down innumerable satellite dishes and easily concealed wireless access points.

That’s not at all impossible. In fact, there are already reports of Basiji entering homes in search of satellite dishes. But here’s the thing: given a sufficiently large number of end-points, the measures required to remove them all could prove toxic to the regime. In the best case scenario, private communications remain possible (if not entirely convenient); in the worst case scenario, the crackdown is so widespread that the Khamene’i regime loses the last shreds of its legitimacy in the eyes of the people, possibly leading to actual insurrection instead of protest.

There’s a general lesson to be taken from this: All of our communications networks are susceptible to the very same suppression and censorship as Iran’s. Networks the world over are centralised and designed with control points similar to Iran’s built in. The Wall Street Journal observes:

Countries with repressive governments aren’t the only ones interested in such technology. Britain has a list of blocked sites, and the German government is considering similar measures. In the U.S., the National Security Agency has such capability, which was employed as part of the Bush administration’s “Terrorist Surveillance Program.” A White House official wouldn’t comment on if or how this is being used under the Obama administration.

The US surveillance of domestic and international traffic is equally intrusive, though not nearly so obstructive as that experienced by Iranians today. It is made easier by exactly the same design vulnerabilities.

But more important than this observation is its corollary: Decentralised networks are critical to the protection of the fundamentally democratic right to communicate. Without communications technologies that reflect this fundamental value, the right to free speech is limited. In the worst cases, it becomes a liability.

Nokia-Siemens, defending its role in the creation of a centralised mobile telecommuncations network, stated recently that:

In most countries around the world, including all EU member states and the U.S., telecommunications networks are legally required to have the capability for Lawful Intercept and this is also the case in Iran. Lawful Intercept is specified in standards defined by ETSI (European Telecommunications Standards Institute) and the 3GPP (3rd Generation Partnership Project).

Yes, decentralised communications come at a cost. They make surveillance efforts of all kinds more difficult. The two competing questions we need to ask ourselves are:

1. How far are we willing to compromise ourselves in the pursuit of state security?
2. How much are we willing to compromise state surveillance capability in order to protect our own freedom to communicate?

These are knotty issues with complex and often subtle ramifications on society. They demand a level of public engagement on the principle – and more importantly, the practice – of free speech that we haven’t seen since the Red Scare of the 1950s.

Technology feels like magic to most of us. We don’t – and don’t want to – know how our communications come about. We just want them to happen.

But in order for them to happen, we must inform – and arm – ourselves with the knowledge, understanding, law and policies that make it possible. Facile observations like Manjoo’s do little if anything to support such an effort.

The Revolution will indeed be digitised, but only if we want it enough.

How dare Karl Rove have the temerity to open his mouth? How dare the Rush Corps pray for failure? Can’t they see we’ve won?

The Left has won, that much is true. But all it’s won is an election, nothing more. This is not the end of the fight. Though they’ve suffered an electoral rout, many Republicans feel they are still on decent ground, and have every reason in the world to feel there’s no great need to change tactics.

For these people, a failed stimulus and subsequent economic disaster is the stuff of dreams. It’s what they’ve been working toward for decades.

This week, the Australian government moved closer to implementing its controversial Internet Content Filter. The ICF represents the Rudd government’s latest attempt to curtail access to illegal or ‘unwanted’ online materials by requiring that all Australian Internet providers implement this filtering system. News sources report that the government has released the technical specification of its pilot implementation.

I’ve written before about the technical, ethical and legal problems surrounding this plan. I maintain that the system is ineffective and inappropriate, foisting a law enforcement role on the nation’s ISPs, and threatening free speech without providing sufficient protection from the very content it seeks to block.

With Internet deregulation on the horizon in Vanuatu, it seems timely to take a look at some of the basic issues underlying the debate.

At the core of the debate over access to Internet content is the issue of privacy. The question of privacy has a few particular wrinkles here in Vanuatu, where family-centric village life still dominates our culture.

There are two fundamental approaches to privacy in the online world. The first takes an individualistic, contractual approach. It states that all information pertaining to you is yours and yours alone, though you may choose to negotiate away some of your personal information in exchange for a given service. In this light, privacy is a desirable, valuable commodity; it’s up to the individual to ensure that they don’t give away too much of it.

I like to call this the American approach, because of its strong emphasis on personal liberty and responsibility.

The second perspective on privacy contends that the cat is already out of the bag. We live in a global community where information about us is available to any who chooses to look. If we accept that point, then the only things left to do are to make sure that nobody gets a monopoly on access to information and that everyone’s information if equally accessible. So if a nosy government wants to know everything about us, that’s fine, as long as we get to know everything the government knows. Proponents of this approach claim that this creates a culture of civility, because anyone who pokes his nose into others’ business will soon find his deepest personal secrets exposed as well. What’s good for the goose is good for the gander.

I call this the Japanese approach, because such a regime relies on mutual respect, restraint and conformity to function properly.

In the American approach, individuals must carefully guard their own personal information. But what happens if they don’t?

Suppose someone joins an online dating service, even though they’re already married. Let’s say they later run for political office. If it comes out that the candidate propositioned women in a discussion forum, well, too bad for him. He disclosed the information; now he has to live with the consequences.

On the other side of the issue, if our candidate contracts an STD, then goes online to order drugs to treat the condition, how should we treat his actions? Does his Internet Provider have a right to know this? How about the government? The American approach says no.

In this context, a content-filtering programme creates huge worries for individuals. In order to filter out the ‘unwanted’ material, a content filter needs to look at every URL you type in. It would be bad enough if the government were looking at this information, but in this case, the people with their eyes on the data would be private Internet Service Providers.

There is nothing stopping a low-level employee from watching this data simply out of prurient interest. In fact, this kind of abuse happens almost every time comprehensive surveillance is conducted. In a famous example, low-level staffers in the US National Security Agency would regularly listen in on romantic conversations between soldiers serving in Iraq and their wives at home. The practice became so common that some even created ‘Greatest Hits’ compilations of their favourites and shared them with other staffers.

The American approach contends that anyone who abuses a person’s privacy is liable to civil or even criminal prosecution. But how to police something like this? The American approach basically states that you are responsible for protecting your own data, but you should have powerful legal tools available if someone betrays your trust.

In order to act though, we have to know someone is spying on us. More often than not, all we have is someone’s promise that they aren’t.

At the other end of the privacy continuum, the Japanese approach to privacy states that personal information is only valuable to the extent that others are willing to respect it. It’s more a cultural approach than a legalistic one.

Let’s take the same example we used above, where a candidate tries to set up an adulterous liaison in an online forum. Everyone can see the information, but before they talk about it, they consider whether this site is considered a public or private space.

In an essay titled ‘Privacy and Paper Walls’, I wrote:

“In the past, most Japanese houses were made of wood and featured sliding doors made mostly of paper. They were useless, of course, for blocking noise or preventing willful intrusion, but they were extremely effective at establishing a distinction between public and private space. A couple in a crowded household might have a furious argument, for example, but if the fusuma, or sliding door, is closed, then as far as anyone in the adjoining room is concerned, the quarrel hasn’t happened.

“It’s hard to imagine how one could possibly ignore something so obvious, but consider the social transaction involved: If you agree to ignore what happens on the other side of the door, I will agree to do the same. Now consider the number of potentially embarrassing noises that could emanate between these spaces, and you’ll begin to appreciate just how useful such an agreement would be.”

Put in terms closer to home for many in Vanuatu: We should consider carefully the beam in our own eye before commenting on the mote in our brother’s eye. Who else uses that dating forum? How comfortable would it be for all of us if public attention were drawn to that site? If society collectively decides that the site should be subject to scrutiny, so be it. But it’s equally possible that people might choose to leave such information alone – no matter how much they might personally disapprove of it – because the public cost would be too high.

A dating site might not be a perfect example of a site people would prefer to consider a private space, but let’s go back to content filtering services:

If people find out that staffers were regularly watching what sites they access, the vast majority would disapprove, because even innocent information can prove dangerous. A woman who’d miscarried several times would not want anyone but her closest confidants to know that she was pregnant again, not because it’s wrong, but because discussing it would be too painful. Likewise, a devout Christian experiencing a crisis of Faith would not necessarily want it widely known. It’s perfectly normal that we should face such moments in our lives, but it’s not something most of us choose to make public.

The Japanese approach, therefore, relies on a social contract in which everyone respects everyone else’s secrets in order that their own remain protected.

It’s pretty easy to see how knotted and difficult privacy becomes in an online world whose very basis is cooperative information sharing. Whether we think that people should take care to protect their individual privacy, or that privacy should be protected through mutual discretion and respect, it’s clear that attempting to regulate online behaviour inevitably creates complicated, difficult and often troubling problems for everyone.

Whether we use online systems or administer them, or both, we all benefit from a minimalist, agnostic approach that avoids prying wherever possible.

I’ll be writing more comprehensively about this issue in Saturday’s Weekender, but there’s a lot of meat on this issue, and I thought I’d package up the wonkery first….

Severance

There does seem to be real cause for concern regarding the changes to severance payments. First, increasing the liability for employers by 300% make a big difference. I spoke with someone yesterday about the potential impact and he related the story of one of his senior staff. This person makes a decent salary in a competitive sector. After nearly 7 years of service, he’d be due roughly 1.7 million vatu (about USD $17,000). But – again, under the current rules – he’d only be eligible for severance if:

1. He stayed at least another 3 years; or
2. His boss was foolish enough to let him go.

Neither is likely to happen.

Under the new rules, this person’s boss would be liable for nearly 7 million vatu. To make matters worse, there’s no longer a requirement that an employee serve a designated amount of time before becoming eligible for severance, should s/he resign.

7 million vatu is more than enough to buy a nice parcel of land, build a house on it, and live at leisure for some time. To say nothing of how happy one’s family would be to share in such a windfall. I can assure you that the temptation to take the money and run is extreme. Especially in competitive sectors where finding further employment is not as challenging as unskilled or semi-skilled work in construction, retail or hospitality.

Maternity Leave

I confess to a little confusion here. The Daily Post[*] recently ran an editorial stating that maternity leave has been doubled. But when I reviewed the amendments, I found that:

1. Additional protections have been put in place to ensure that a women returning from maternity leave is given the same or equal status in terms of work, remuneration and benefits;
2. her time allocated to breast-feeding is doubled to (although the number of times she can breast feed has not been changed);
3. women are granted up to 12 weeks maternity leave, starting 6 weeks before delivery and lasting 6 weeks after.

I’ll be the first to grant that this conclusion is based on what I remain convinced is an ambiguous and redundant insertion (noted in blue in the preceding post). That said, the only quibble I can find with that breast feeding a child only twice between 7:30 a.m. and about 5:00 p.m. would be problematical for some children. Having twice as much time (1 hour instead of 30 minutes) in each interval is useful, but ultimately of questionable value without some flexibility over how that 2 hour total is apportioned.

[*] Full disclosure: I write a weekly column for the Daily Post. Evidently, that doesn’t mean I can’t disagree with some of their editorial stances.

Misc

The remaining changes are mostly neutral or of moderate effect:

• allowing an employer to deduct from severance if an employee hasn’t given adequate notice;
• increasing the rate at which annual leave is accrued;
• reducing the eligibility time for annual leave.

It seems businesses are well within their rights to grouse over this, especially given that Vanuatu workers currently enjoy more public holidays than just about anyone else. But in my opinion there’s no cause for crisis.

And where in all of this is the previously announced decision by Minister of Internal Affairs Patrick Crowby to increase the minimum wage? To be fair, the issue isn’t dealt with in the Employment Act, but it strikes me that an increase there would be of greater import to the average ni-Vanuatu worker than improved severance and maternity benefits.

Work-arounds

The problems created by this 400% increase in severance and related changes are real, and require remedy. Certain of the larger institutions in this country would face insolvency if their staff were to avail themselves of the windfall awarded them by these amendments.

The law was passed unanimously by Parliament (about which more later) The law was passed, apparently, with only two or three abstentions and no votes against; it remains only for the President to sign it and for it to be gazetted before it has legal effect. As much as one might be inclined to encourage His Excellency to sign off on some of the other Acts awaiting his pen (most notably the Family Protection Act), there’s really nothing to be done but accept that a bad law has been passed, to put it into place and then (quickly!) to take measures to mitigate the worst effects of the legislation.

The Employment Act stipulates that the Minister has broad rights of exemption where employment issues are concerned. About the only thing he can’t do is legalise forced labour. He could, at his sole discretion, exempt everyone from the severance provisions of the Act with the promulgation of a single letter. This might buy enough time to either repeal the relevant amendments, or better yet, to perform a decent consultation and enact some more sensible further amendments in a later Parliamentary session.

[Update: The consensus among the experts I've spoken with is that a blanket exemption from the most contentious amendments would be an exceptional, but entirely legal, course of action.]

If this doesn’t transpire, there does seem to be another loophole. In cases where there’s been a seamless transition between employers (e.g. a change of ownership following the death of a principle, the re-shaping of a partnership, or the transfer of ownership of a company), the Act has the following to say:

(6) An employer who is liable to pay severance allowance under subsection (5) shall –

(a) be entitled to deduct any period and to make any deduction which any previous employer would have been entitled to deduct or to make had the previous employer become liable to pay severance allowance; and

(b) be exempt from any liability to pay the allowance in respect of any period for which any previous employer was exempt from such liability.

(Emphasis mine.)

Now, that says to me that with a little corporate sleight of hand, a company owner could maintain continuity in the workplace, avoid having to terminate all his staff and pay out their existing severance immediately, and remove ‘any’ liability prior to the enactment of these amendments.To my feeble faculties, ‘any’ sounds like it includes pre-existing severance rates which existed ‘any’ time in the past.

(CAVEAT: I’ll re-visit this last point once I’ve had a chance to pass it by some lawyers. I may well be am talking through my hat.)

And here’s the update: I’ve spoken with a couple of lawyers, and they agree that, although the Act seems somewhat contradictory in this section, to construe it as I have done would be “a tortuous interpretation” in the words of one. He continues:

“The general rule is that a piece of legislation should be read as making sense. A common sensical interpretation, for me, would be that the exemption from liability did not relate directly to the original liability, but to extraneous exemptions[.]“

It’s axiomatic that in our so-called Information Society, improving communications is synonymous with improving people’s quality of life. Easier access to information is generally accepted as a good thing.

Far be it from me to gainsay the truisms that keep me in pocket money. But I do enjoy being wrong.

One of the most important lessons I’ve learned in my time here in Vanuatu is that trends and patterns are not so universal as they sometimes seem. Things that are self-evident elsewhere in the world should not be taken for granted here. Society, geography, economy and a few dozen other differentiating factors make Vanuatu unique in important ways.

Received wisdom, even from the leading lights of development theory, often does more damage than good if it’s not leavened with a solid grounding in local conditions. And that’s why I’ve been waiting with bated breath for an upcoming report by the Pacific Institute of Public Policy (PiPP) on the social effects of mobile telephony in Vanuatu.

The report, scheduled for release next month, runs over 120 pages. It’s a thorough investigation of the impact of the telecoms market liberalisation policy on households throughout Vanuatu. In the weeks ahead, we’ll look at it in more detail. This week’s column, though, investigates a single incidental datum that, I confess, I completely misjudged.

In the months leading up to Digicel’s roll-out, I confided to my friends that I was worried they would eat TVL alive. Their aggressive approach in other markets looked like it would be devastating when unleashed on what appeared at the time to be a rather complacent incumbent.

It appears that I got that prediction wrong. A survey of households shortly after the roll-out shows an overwhelming majority of rural users with Digicel accounts, while the exact opposite is true in our urban centres. The sampling, while geographically limited, is large enough to be statistically significant, as we wonks like to say.

These numbers date from shortly after Digicel first turned on its service. It’s entirely possible that the ratio has changed since then. But given that both companies have been tight-lipped so far with regards to their sales or usage levels, this is the best objective data we have to judge them by. (Neither Digicel nor TVL responded to requests for comment on this story.)

That Digicel would dominate the rural population comes as no surprise. Their more extensive network gives them an effective monopoly in many parts of the country. But even in rural areas where TVL had established a foothold prior to Digicel’s arrival on the scene, the survey showed a preponderance of Digicel customers. Anecdotal evidence from north Efate seems to support the perception that Digicel’s comprehensive coverage made them a more compelling choice for rural customers.

So what, if anything, went wrong in Vila and Santo? Why don’t customers appear to have flocked en masse to Digicel? Well, some part of it may be due to a psychological phenomenon known as ‘loss aversion’. Briefly stated, loss aversion theory states that losses are twice as powerful as gains, in psychological terms. So either Digicel would have had to find a way to make people see them as vastly better than the existing alternative, or Telecom would have had to do something make themselves look far worse.

In other words, TVL benefited from their status as ‘the devil you know.’

But more than that, TVL’s marketing campaign was clear and focused. They matched Digicel’s mobile service offering nearly feature for feature and closely aligned their prices. Having secured their urban base from mass defections, TVL have since increased their rural coverage, apparently in an attempt to bring the game to Digicel’s half of the field, as it were.

Cable and Wireless, one of TVL’s parent companies, seems to have learned valuable lessons from its Vanuatu turf war. It’s already taking steps in other vulnerable markets to ensure that Digicel doesn’t find a way to differentiate itself from the incumbent. In the Solomon Islands, Our Telekom (the monopoly carrier) has changed its corporate colour to a primary red, virtually indistinguishable from the same crimson tide that Digicel splashed all over Vanuatu when they debuted here.

Of course, mobile subscription is not an either/or proposition. A significant minority of the urban survey sample stated that they had SIM cards for both providers. They used their Digicel card to reach their family in the islands, and their TVL card to reach people in town.

(Full disclosure: I use both services, too. In fact, I went shopping for a dual-SIM mobile last weekend.)

So do we chock this up as a win, loss or tie for the upstart Digicel? Without more recent – and more detailed – data, it’s hard to tell. We can safely say, though, it seems clear now that fears of TVL’s imminent demise were somewhat exaggerated.

Indeed, there’s every possibility that TVL is doing just as well as before, and perhaps a little better. In their rush to get things started, Digicel was quite accommodating on the terms of their interconnect fees with TVL – perhaps more than they needed to be. Now that the pool of callers has increased so much, their urban customers’ fidelity, combined with their continued monopoly in land lines, could mean that they’re seeing greater call volumes and revenue than ever before.

It’s entirely possible that things have changed since this survey was conducted. But even if the landscape has altered somewhat, I suspect that the larger features remain intact.

And that would be good news indeed. I’ve stated before that the best outcome for consumers in this liberalised market is a knock-down, drag-out fight in which both companies battle for every inch of turf, but neither gains a decisive advantage. We can’t afford to allow complacency to re-enter the picture. We want both companies to keep prices low; we want each to anticipate the other’s moves and to keep the game as close and competitive as possible.

TVL, Digicel and a few others are gearing up right now for the next round in the liberalisation game. Before too very long, we’ll see Internet services thrown into the mix. If the patterns that we’ve seen from the early days of mobile competition hold true there, we’ll see real benefits for the country.

Each of the new entrants into the market is going to have to work harder than ever to set themselves apart from the others. TVL has shown that it’s capable of getting the lead out and duking it out toe-to-toe with one of the fiercest and best-resourced challengers in the telecom world. It will be interesting to see how they fare in a more fluid scenario, with multiple players all manoeuvring for the dominant position.

Where Internet is concerned, most of the competition will happen on TVL’s turf. If experience in the mobile arena is any indication, it won’t be sufficient to bring the cost of switching close to zero; the challengers will have to provide a compelling reason for people to change providers. Assuming that Telecom is capable of pulling its socks up to the same extent that they have in the mobile arena, the newcomers are going to have to find some very creative solutions indeed to set themselves apart from the crowd.

In July 2004, the World Bank presented a report on the state of Vanuatu’s public utilities to the public.

This was a watershed moment. From that moment, the government of Vanuatu formally committed itself to a process that ultimately led to the break-up of the telecommunications monopoly and the creation of the Utilities Regulatory Authority.

The transformation since then has been nothing short of remarkable. Nobody seems to have anticipated just how widespread and immediate the effects of telecoms liberalisation would be. Some of the expectations outlined in the Infrastructure Regulatory Review appear now to be quite conservative, in some cases landing nearly outside the ballpark.

Perhaps most telling is the report’s contention that ‘low income, low population base, low urbanization and low literacy rate are characteristics which suggest that demand for telecommunications services in Vanuatu is likely to be constrained.’

Experience seems to indicate quite the opposite.

Between 2002, when TVL first introduced mobile telephone service, and 2004, when the report was released, the number of mobile subscribers increased to 7500. The overwhelming majority of these subscribers were located in Vila and Santo. That number rose to about 20,000 even before Digicel came onto the scene.

The factors driving this surge lie in the nature of Vanuatu society.

Village life in Vanuatu features very tight communication loops from which no one is exempt. Conformity, congeniality and consensus are invaluable commodities in island culture, because disagreements exert an immense price on the community. The one-to-one aspects of village communications are significantly enhanced by mobile communications. The result is that our island geography (and gestalt) creates more value per user than traditional business analysis might lead us to believe.

One of the questions that comes up regularly when I talk about this is how people in the islands will be able to afford mobile services. Given that 5000 vatu per month is not an unusual rural family income, even topping up with 100 vatu credit (currently the smallest increment available) would be a burden, would it not?

The answer is yes and no.

There’s an interesting relationship between commodity prices and agricultural production here in Vanuatu. When the price of coffee, copra or cacao rises, production generally goes down, not up. That’s because the need for cash in rural areas is quite limited. Once a villager earns enough to pay school fees, clothing and a few staples, there’s no more need to make money. So if they can earn the same amount of money for less effort, they do so. Wouldn’t you?

This is one of the factors leading to a kind of economic insulation for the average ni-Vanuatu. The bottom line is that the cash economy remains small in rural Vanuatu because cash is only a small part of the overall economy.

When mobile communications are introduced, the perceived need for cash increases. In the short term, this puts stress on the pocketbook, but the situation rights itself through a nominal increase in the amount of cash generated. Dry another half ton of copra, and you’ve bought yourself a mobile, along with enough credit for a few months, all without sacrificing any other expenditures. Add to this the increased efficiencies that come hand in hand with better communications, and we’ll likely see more prosperity and economic activity – in cash terms – than less.

In other words, this is not a zero sum game.

The World Bank further assumed that large household size would limit the number of mobile phone subscriptions. Anecdotal evidence seems to indicate that the opposite is true, at least in Vila and Santo. Individual family members are obligated to share their phone with others, true. But the presence of one phone only increases the pressure on others to purchase their own. Now that there is a phone in the house, it becomes a viable means for individual members to keep in touch when they’re away. But only if they own a phone themselves.

The role played by family jealousy and rivalry in this equation should not be discounted, either.

One statistic that might leave us all feeling slightly nostalgic: Between 2002 and 2004, TVL reported a grand total of zero faults in its GSM service, accompanied by a peak-time call failure rate of zero percent. In 2007 and early 2008, as we are all vividly aware, GSM service quality suffered terribly under the twin burdens of over-subscription and equipment malfunction.

TVL found itself in the uncomfortable position of having to wait for Digicel to pick up some of the load. Cold business logic dictated that further investment in capacity would be foolish in the face of certain losses to their new competitor. Since Digicel’s arrival, the problem seems largely to have fixed itself, although intermittent problems calling between the two services are still being reported.

One critical metric that will bear close scrutiny in the months and years to come is availability. In 2004, TVL reported that they cleared 76% of all faults within their target time. The number looks worse when one considers that their time frame for urban customers was 3 days, and a whopping 30 days for rural subscribers. Current figures for neither Digicel nor Telecom Vanuatu were available as this column was being written, though anecdotal evidence seems to indicate a significant improvement, at least in the municipalities.

The place where we experience service improvements the most, though, is in our pocketbook. In 2004, TVL’s fixed-line telephone services and international calls were among the most expensive of the 13 comparable markets reviewed in the World Bank study. One notable exception was the cost of national calls. Telecom’s flat-rate pricing for all national calls made them the cheapest of the lot. Mobile prices, on the other hand, were not nearly so competitive.

The intervening years have been very kind to consumers. In a series of mostly unilateral moves, TVL drastically reduced prices on many of their services. Since Digicel’s mobile service started, mobile customers have seen a further decrease of up to 50% on calls, depending on their subscription. Per-second billing and Digicel’s free ‘call me’ text service also help make a few vatu go a long way.

One area that the World Bank study on utilities studiously ignores is rural power. The report’s authors note that they limited their review to Vila and Santo at the government’s request. Be that as it may, we have yet to see a coherent rural power policy from government.

Without at least micro-generation in the islands, further improvements in communications and access to information will likely prove difficult.

Whoever the next minister of Infrastructure and Public Utilities proves to be, there remains a great deal of work to be done. One only hopes that they will take their role as seriously as their predecessor.

The effect of this sudden loss of service was particularly severe on Pacific island nations, because in many places this satellite represented the only communication link to the outside world. As of January 21, some countries were still offline, and others were still experiencing problems.

International communications were badly disrupted. International telephone and fax traffic stopped. Internet access was gone. Banks and credit card companies could not conduct transactions, leaving tourists without cash and resort owners accepting debts on faith alone. Airlines and airports could not communicate easily. Most importantly, disaster early warning systems were severely impaired.

When reviewing the list of affected countries, one thing quickly becomes clear: the countries most affected by the satellite failure were those whose communications systems had a single point of failure.

Single Point of Failure. Every network analyst knows, and fears, this term. It’s simple enough in principle: when planning a communications system, always make sure that there’s no single part whose failure can bring the whole system down.

In practice, it’s not as easy as it sounds. The failure of the Intelsat 804 satellite continues to cause significant problems throughout the Pacific region, particularly among the small island nations. This is mostly because the cost of communications makes having back-up satellite access very difficult.

Because of the relatively small amount of traffic they buy, Pacific island nations are relatively unimportant to international satellite providers. Technicians working to fix the problem reported spending hours, even days, trying to contact Intelsat staff. They spoke of being given emergency space on an alternative satellite, only to be bumped off by other customers.

The money that a satellite provider makes from a small island country is, relatively speaking, very small. From a business perspective, we’re not very important to them. But for us, international communications are more important than just business.

What if there had been a natural disaster? At the height of the hurricane season, in a region prone to earthquakes, volcanoes and tsunamis, this is not merely idle speculation. In fact, shortly after the outage occurred, there was a strong earthquake in Micronesia. Had it caused even a localised tsunami, the loss of communications could have cost us many lives.

Looking at the list of affected countries, it quickly becomes clear that those who suffered most are the ones who had only one connection to the outside world. Several countries had separate contracts for data and voice communications. When voice communications disappeared, they were able to use their data lines to compensate. In one case, technicians were able to use Voice Over IP (VOIP) protocols to enable outbound telephone calls within twelve hours.

What lessons can we take from this incident? It’s clear now that those carriers who relied on a single source for their data and voice communications paid most dearly. Their customers paid dearly too, in terms of lost business. It was pure luck that no lives were lost. Next time, we might not be so lucky.

But what can we do to prevent this happening again? The answer is to remove single points of failure wherever possible. Satellite communication is expensive, and underwater cable even more so. Still, it’s been demonstrated that opening national markets to multiple data carriers usually reduces prices for consumers and increases revenues for the carriers. In New Caledonia, data use has increased by one thousand percent since it opened its communications market three years ago. Importantly, they were one of the least affected nations when the Intelsat 804 failed.

Opening the communications market is not an appropriate answer for every island nation. Some are simply too small to support it. In these cases, using separate providers for voice and data service at very least ensures that if the one is lost, the other is still available.

Single Points of Failure are a liability in every system. International communications is one area where such a liability can cost lives.