The internet is fast becoming the essential infrastructure of the 21st century. It is as revolutionary in its way to how people live, work, play and interact as previous revolutions in transportation, energy and telephony have been in theirs. For billions of people already, and for billions more to come, life without digital interaction and the services it enables is all but unthinkable.
But suppose the unthinkable were to happen. Imagine that the infrastructure fails. Think of a bridge with a fractured support. Or a pipeline slowed to a trickle. Or an electrical grid that functions only intermittently. Such infrastructure-related realities are all too frequent occurrences – and they represent big daily headaches and economic impediments for the people who must contend with them.
The costly and complex infrastructure that carries the traffic that makes digital services possible is hardly immune to similar headaches and impediments. In its own highly interconnected way, the internet can be as fragile as a bridge or roadway exposed to the elements. It is subject to breakdowns; it needs investment and maintenance; it has limitations in reach, penetration and capacity that require innovations to overcome. Perhaps most important, it needs the continuing collaboration of its own ecosystem of participants – companies, governments, users and other parties – to keep things moving.
This report examines the present threats to digital infrastructure and suggests approaches and actions for addressing them before they affect the flow of information and services that serve the digital economy. Each chapter addresses a technological, commercial, policy or regional challenge that is of particular significance.
Chapter 1. Introduction: The Digital Infrastructure Imperative
The potential of the digital economy can only be realized if digital infrastructure keeps pace.
- Significant impediments constrain the continued development of digital infrastructure. Without corrective action, the drag they impose will get worse.
- Communications service providers (CSPs), digital service and content providers, hardware and software manufacturers, industry groups, and governments all play critical roles.
- Effecting change is the collective responsibility of all the participants in the digital ecosystem.
Chapter 2. Growth Driver: Developing Digital Services
Countries need energetic digital service sectors. They are drivers of social and economic development, job creators, talent magnets and the exports of the future.
- Robust digital service sectors depend on a complex ecosystem that includes adequate infrastructure and an investment-friendly business environment.
- Governments can play a key role in catalysing digital development by creating the right environment.
- Governments also need to know when to step aside and let markets flourish.
Chapter 3. Spectrum: Invisible Infrastructure
The availability of mobile spectrum is one of the biggest, and most complex, infrastructure constraints.
- Unless changes are made, inefficiencies in allocation, utilization and harmonization of spectrum will only get worse as demand increases for mobile services.
- Governments must release additional spectrum – licensed and unlicensed – for private mobile use, as well as take steps to encourage spectral efficiency. New approaches to encourage harmonization are required.
- Establishment of secondary markets and pursuit of alternative deployment models are necessary to meet the fast-growing demand for mobile data.
Chapter 4. Staying Interconnected
Resolving internet protocol (IP) interconnection disputes is required to ensure digital traffic continues to flow efficiently.
- The rapid rise in streaming video, combined with conflicting views over who should build and pay for internet infrastructure, has led to IP interconnection disputes in recent years.
- Because these arrangements dictate how traffic is exchanged among networks, it is in everyone’s interest to resolve disputes rapidly.
- Despite differing interests, CSPs and content providers can find a mutually beneficial path that maintains the commercial nature of IP interconnection contracts with no unfair discrimination.
Chapter 5. How Regulatory Policy Can Keep Up
Policy and regulation must be modernized to deal with 21st century realities and issues.
- Today’s critical issues span a much more complex, interconnected value chain; policies must take into account the impact on investment and innovation across multiple industries.
- Given the rapid pace of change, policy-makers should pursue forward-looking, light-touch approaches to regulation.
Chapter 6. The Challenge for Europe: Crafting a Digital Renaissance
Europe’s digital health requires attention; without infrastructure investment, it is difficult to see the EU capitalizing fully on the benefits of the internet economy.
- Europe has gone from digital leader to laggard in less than a decade.
- Current industry economics constrain investment in telecommunications infrastructure; consumers pay less for connectivity than in some other countries, but they are missing out on advanced services.
- Policy-makers should improve the investment environment for infrastructure by allowing targeted consolidation; operators must also adapt their business models to grow digital services.
- A true single digital market, in which data and services can flow across borders, is required to build a robust digital service sector in Europe.
Chapter 7. Encouraging Infrastructure Investment and Innovation in the US
New sources of competition and technology will help the US to remain a world leader.
- While consumer and business internet use is robust in the United States, there is debate over whether the current market is driving infrastructure innovation.
- US policy-makers should encourage the innovations taking place in local markets to heighten competition and investment, especially in “the last mile”.
- Policy-makers should also encourage investments in next generation technologies to accelerate the transition to high-capacity IP networks.
Chapter 8. Emerging Markets: Big Challenges, Big Opportunities
Digital technologies can have an outsized impact in emerging markets, but they face big challenges in getting established, many of them infrastructure-related.
- Lack of existing infrastructure allows operators to adopt and implement the new technologies that suit their markets’ current situation and projected requirements.
- Public-private partnerships can encourage efficient and expedient infrastructure deployment in emerging markets.
- The development of local digital service markets can be big steps towards addressing local problems.
- Bridging the digital divide may require non-traditional, innovative approaches, especially in funding and market access mechanisms.
Chapter 9. Towards a Robust Digital Infrastructure
Effectively delivering digital infrastructure and realizing the promise of the digital economy rests on three pillars:
- Commitment to actions that promote the long-term growth of the digital economy
- Removal of impediments to the expansion of digital infrastructure
- Modernization of policies and regulations to encourage investment and innovation throughout the internet ecosystem. (See Figure 1.)