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This month's issue:

(March, 2002)
This issue of Release 1.0 served as the documentation for the 2002 PC Forum. It includes interviews and profiles of the conference speakers, overviews of all the sessions and descriptions of the company presenters.

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Getting Ghana Going
by Esther Dyson
distributed by the New York Times Syndicate - March 20, 2002

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After a weeklong visit to somewhere new, the most important thing to remember is that one trip does not make you an expert. Still, I cannot resist commenting on my recent trip to Accra, the capital city of Ghana, in Western Africa.

Among my meetings there, I joined a lunch discussion with local entrepreneurs and government officials about opportunities and obstacles to economic development. The sponsors were BusyInternet, a local Internet cafe-plus, and Jim Moore of the Open Economies Project at Harvard University's Berkman Center.

Even as the local entrepreneurs were discussing the importance of government support for their sector, one of them, software free-lancer Ebow Halm, said, "The government needs to consider the users' needs as well as the IT community's needs."

Sometimes what benefits one party may harm another, and well-meaning charity may not always have its intended effect. That's the notion behind the site of the meeting: BusyInternet. Created by Welsh entrepreneur Mark Davies, it provides local people with inexpensive Net access, much like a library or a post office.

WELSH RARE BYTES

Wealthy from two other start-ups -- Citysearch and First Tuesday -- Davies had originally planned to set up a nonprofit Internet service. But he quickly concluded that a for-profit entity would do more good, reach more people and finance its own expansion. A free service, on the other hand, would have to be rationed and would compete unfairly against Accra's other Internet cafes.

Rather than simply provide Net access to the poor, Davies has set out to help the poor get rich enough to buy their own Net access.

So as cheerful and inviting as it is, BusyInternet is a lot more than just a cyber cafe. It's a commercial center.

Built from a gutted bottled-gas plant on a main drag in Accra, the two-story operation has about 100 terminals in an open downstairs, and 50 more in private carrels and wired offices upstairs. There's also a waiting area as well as a service center to collect printouts (10 cents U.S. per black-and-white page) and send packages or faxes.

Instead of opening a business incubator with complicated rules and business plans, Davies simply hooked up 1 megabyte of bandwidth and set up shop, offering terminals by the minute and 15 wired offices by the month.

The kind of people who turned up with money to use the offices represent just the type of entrepreneurs you could have picked with a complex development plan and careful analysis of local needs, but they selected themselves: small IT-dependent business people, some e-commerce folks, but mostly Web development or programming professionals.

The lunch we attended was only one of the activities Davies and his local partners are building around BusyInternet. For now, however, the basic access business is already paying the way: Bandwidth in Ghana is so scarce that simply providing good connectivity at retail prices is a great business model.

In a country where the ability to communicate is very expensive and most people have neither phones nor computers where they live, such services would seem wasteful delivered direct to one's home. In Accra, by far Ghana's most wired city, there are several hundred such cafes, averaging perhaps eight terminals each.

BEATING THE HIGH COST OF BANDWIDTH

So what did we learn at our lunch?

First of all, that Internet cafes are not just a preserve of tourists and college students. People of all kinds were in the cafe both times I visited. Not a terminal was unused, and the building operates 24 hours a day.

Mostly, customers e-mail, rather than surf, to communicate with friends and family, hunt for jobs, or just get things done. At $1 U.S. an hour, using the computers for entertainment gets expensive. In Ghana, formally employed factory workers can earn up to $45 a month, but many people have no formal employment.

And bandwidth in Ghana costs 10 times or more than it does in the United States. Davies pays about $8,000 a month for his 1MB shared connection, plus a yearly license fee to the government of $2,000.

Most of the entrepreneurs I talked to host their sites in the United States. It's less expensive and more reliable.

"To get across town you have to bounce through satellite into the states and back down here, so it's about twice as fast to host them in the U.S.," Davies explains. "Getting a local Internet exchange should change that and bring many servers (and jobs) back onto the continent."

Does wire cost so much more in Ghana? Of course not. It's more complicated than that. The country has access to about 20MB of Internet bandwidth, which is mostly unregulated though you need a license to offer it.

But for a variety of reasons, including investors' perception that there's no market, capacity is low and prices remain high.

There are plans for state-controlled Ghana Telecom, as well as private investors and other companies, to increase bandwidth and start a local exchange.

But what that will mean to wired Ghanians is unclear.

BusyInternet should benefit from the greater capacity a local exchange would provide, and from a new sea-based fiber-optic cable in the works. And its customers will benefit from that, too, as well as from increased competition that would improve service and lower prices.

But will BusyInternet and its competitors be viewed as a model of development, or as a disruption of the status quo? The business climate can seem a bit stormy if the Ghana's government -- or its government-controlled utilities such as Ghana Telecom -- sees emerging entrepreneurs as rivals.

But things do seem to be improving now, we were told. And I hope it's true. Ghana's best hopes lie not with big projects, but with entrepreneurial efforts that can make things work on a small scale and then scale up.

Much of the country's $1.3-billion government budget doesn't come from its economy, but from outside donations. And most of that money doesn't go directly to citizens. It flows into large projects and subsidized government programs ... many of which compete with -- or stifle -- local development.

To some, an entrepreneur like Davies may seem like a carpetbagger: a Welshman who made his name in the North and now runs a for-profit venture in Ghana. But if he is successful, he will build more facilities, raise the current 40 percent local share of ownership, hire more Ghanians, and offer more cost-effective services to more users. Some of those users will themselves become entrepreneurs.

So you decide which model is better: government subsidies and control or a little old-fashioned carpetbagging.

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