There is no denying the economical impact that the Internet has on Belize specifically in tourism and trade in the emerging global economy. But the case for open Internet access is not only one of economic numbers but also of cultural, educational, and technological evolution of the country. And to improve the quality of life of Belizeans we MUST evolve in order to participate in the global economy.
The high cost of international phone calls in Belize has created interesting methods of communications for Belizean companies and their foreign counterparts. In the late 1980s and throughout the first half of the 1990s the method of choice was the fax machine. Companies and individuals realized that they could fax each other and communicate more for less money. This solution had problems: it was not interactive, not real-time and lacked some of the privacy that is sometimes necessary with business communications. Nevertheless, it continues today as a form of international communications solution not only for companies lacking newer technologies or the financial resources to afford these technologies, but also as a back-up to newer technologies such as email which can at times be unreliable in Belize.
With the advent of Internet access in Belize there was a definite shift into the new technological age of on-demand information. Those with the resources were able to connect to the world via the Internet and share information at a fraction of the cost of even the fax method. Communications became more prevalent and not only were businesses now able to communicate on a one-on-one basis, but they were also able to market their wares to the world. First, and still leading the business bandwagon on Internet marketing in Belize, are businesses in the tourism sector. Although no surveys have been done, some estimate that nearly 30% of hotel bookings have been over the Internet. Others say the figure is higher and select businesses are planning on marketing solely via the Internet. All agree that we are witnesses to the dawn of a new age of global communications that promises nothing but great things for Belize -- IF we are able to pursue our technological first steps.
Belize‰s first foray into online communications was a Bulletin Board Service (BBS) set up by Manolo Romero, former Chief Information Officer for the country of Belize. The BBS evolved into Belize On-Line which became the first Internet Service Provider (ISP). Due to monopoly rights granted BTL, Belize On-Line was closed and BTL Internet Services was founded. Today, while there are Belizean companies providing web site hosting, design, and general support, BTL is the sole Internet Service Provider (ISP) in Belize.
What is an ISP? An ISP is the first point of access to the Internet, it is the local company your computer connects with to access the Internet. A great analogy, and one that is used often in describing the Internet, is that of a major highway with tributaries connecting to it and on-ramps connecting to the tributaries. In Belize, BTL is the on-ramp AND the tributary to the Internet and therefore access is through a single server, a single portal to the outside world. In other words, in Belize access is through a single point that can and has failed in the past thereby disconnecting our country from the rest of the world!
To solve the issue of potential failure of the single point of access to the Internet from Belize, redundancy must be implemented. Internet redundancy is accomplished by providing multiple access points and network connections that will allow Internet access and traffic to continue in the event of failure of any single component of the network without apparent loss or degradation of service. The first step in creating Internet redundancy is relatively easy and makes financial sense to both ISPs and BTL. BTL can authorize other companies to act as ISPs while still maintaining control over the Internet network. BTL would charge the ISP a flat or reduced rate for high-speed access to its Network. BTL would maintain control of the "tributary" and charge a "toll" for access to the Internet Superhighway. The ISP then resells access to customers, in essence providing redundant on-ramps to BTLs tributary. This is common practice throughout the world and is the basis and the fundamental concept behind the Internet. Of course the Internet and in general network configuration takes into account many more complex redundancy issues and even the Superhighways have redundancy built in. But it is a first step in reliable connectivity.
Besides redundancy for the consumer, why should the Belize Government or even BTL allow this? Let‰s take the latter first. Besides the obvious positive public relations that would result from such a move, BTL stands to gain in the resulting increase in bandwidth demand. Remember, BTL still maintains the connection to the Internet. This simple act of allowing additional ISPs, however, will reduce the cost of maintaining the network while simultaneously increasing the revenue stream by increasing the number of users subscribing to Internet service in Belize. Increasing bandwidth while reducing cost may seem like an impossibility but it has been proven as in the case of India, for example.
Videsh Sanchar Nigam Limited (VSNL), the state media monopoly in India, entered the Internet business in 1995. In September 1997, two years after Internet services was started, the government ended the monopoly. At that time there were 51,334 Internet subscribers. One year later in September of 1998, the number of subscribers had risen to 144,041 (from VSNL statements at http://www.vsnl.net.in/english/finance/investo1.htm and http://www.vsnl.net.in/english/finance/IUP9.htm ) and revenues from specialized services (read Internet and data circuits) were up a whopping 63% even given the general slowdown of India‰s economy. Internet revenues for the same period were up 119% while "The expenditure has grown at a lesser rate than the traffic revenue mainly because of
1.depreciation of rupee, given that 70% of telephone revenues are received foreign currency and only 35% of payment is made in foreign currency during this period
2.higher use of low cost cable circuits vis-a-vis satellite circuits
3.optimisation in traffic routing between our gateways.
Of importance to this discussion is item 3. If we are to reword VSNL‰s statement we could say that "traffic revenue has grown at a faster rate than expenditure due in part by the better use of traffic routing". Or more simply, revenues went up a lot faster than expenses, meaning greater profit for VSNL.
Here‰s an oversimplification of the process behind increased revenues/reduced cost:
The ISP by purchasing large clumps of bandwidth can resell that bandwidth at a lesser cost to its customers. How is this possible you ask? Well, it is a theory used daily in telecommunications that uses complex tables to calculate service levels but it can be demonstrated a lot easier than it could be explained. Let‰s use our own phone company, BTL, for instance. Between the island of Ambergris Caye and the mainland there is a finite amount of possible connections (lets say 64). Let‰s also say that on the island there are approximately 1000 phones. Now it becomes quite obvious that only 64 simultaneous conversations would be possible between the island and the mainland regardless of the direction from which the call was initiated. The 65th person that tries to call the mainland would experience the ubiquitous "I‰m sorry, all circuits are busy" message.
Now let‰s apply this to Internet Access. The ISP signs up 1000 subscribers and may have the capability of physically connecting, say, 256 of those simultaneously. The bandwidth they purchase from BTL is dynamically allocated to the 256 connections with the only apparent problem to the subscriber being slow download or upload times during peak hours of traffic. Of course similar to the example above, the 257th caller gets a busy. Now the fun begins.
Because the new ISP has reduced the cost of Internet access more subscribers are signing up and because more subscribers are signing up the ISP needs more phonelines AND Internet bandwidth access from BTL. Poor BTL, of course makes money selling the bandwidth and the phonelines. Of course BTL uses similar formulas to calculate level of services and bundles numerous ISPs together, some utilizing more bandwidth than others, to reduce cost; all the while making more money.
So that answers the increased revenues (and some reduced expenses by bundling ISPs) but what about the decreasing costs? This manifests itself in a number of ways. The first is in the purchase of bandwidth and hardware from its supplier. Like everything else in life, buying large quantities reduces cost. But BTL also stands to benefit from reduced costs from the removal of the need to maintain concentrators, multiplexers, and the toll charges for forwarding the calls to the centrally located equipment it uses, all those costs being passed on to the ISPs. Again, further discussions about the latter would be beyond the scope of this article but suffice to say there are savings to be realized and BTL knows how!
To summarize, BTL can increase revenues with no significant increase in expenses all by optimizing traffic routing and consenting to an elimination of the Internet access monopoly.
How about the government? They, like BTL, stand to benefit from the positive public relations. The increase in revenues for BTL and the revenues of the ISPs translate directly into increased revenues for the government. Indirectly, the new business opportunities plus the expansion of existing businesses brought about by the increase in trade (both foreign and local) will result in an increase in employment. Further, the resultant increase in exports from Belizean businesses selling to the world would increase the influx of foreign money and strengthen the Belize Dollar.
The benefits of technology and the Internet are vital for the growth of Belize as a player in the global market of today. The Internet blurs the trade borders between countries and opens businesses to markets they previously could not afford to reach. In tourism alone Belizean companies have benefited significantly by marketing via the Internet (although revenues have been lost because of failure at the single point of access). If Belizean businesses could market their agricultural, aquacultural, or manufacturing products the way companies in the tourism industry have marketed theirs, the benefits would be a windfall of international trade and recognition of Belize as a major market. It is imperative however that early and confident steps be taken to capitalize on Internet technology. It is not merely enough to give Belizeans the Internet; government must create an environment under which the infrastructure for emergent technologies can evolve.
Copyright 1999 Jorge I. Varela. May not be reproduced without the express written consent of the author.
Copyright by Casado Internet Group, Belize