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August 5, 2014

Why internet outages are doubly bad for business

Analysis: Lack of investment is discouraging future enterprise.

By Jimmy Nicholls

People joke about the panic that ensues when Google goes down for two minutes, but the fact is that most of the West is now thoroughly dependent on the internet. It’s the place we turn to not just when we need answers to the pub quiz, but also to book holidays, find a new job or even our future spouses.

Europe and North America are so well connected that we forget life without the internet is even possible. But in others parts of the globe it’s not merely possible, but a serious concern, says Kaveh Ranjbar, chief information officer of the Réseaux IP Européens Network Coordination Centre (RIPE NCC), an internet registry.

"In many parts of the world, including the Middle East and Africa, cable cuts are the biggest reason [for outages]," Ranjbar tells CBR. "Things can happen because of weather conditions; ships anchors can hit cables and all that stuff."

Glancing at an internet infrastructure map will show a plethora of cables serving Europe and North America, while countries in the Middle East or Africa can be connected by as little as two cables. "The other thing is [Europe’s] are really high capacity cables, which means if one is disconnected the others can handle it," Ranjbar says, adding that the same is true for North America.

Low investments begets low investment

But lack of infrastructure tends to be a circular problem: opportunities are fewer without the internet, so companies are reluctant to invest, which means the internet is never developed. "It’s a chicken and egg problem," says Ranjbar. "If you don’t bring the internet you don’t create the demand, but the demand is not there because there is no internet."

According to the International Telecommunications Union (ITU), only 11% of African households have internet access at home, compared to a third of Arab states and 78% of European ones. The same UN agency says that in the developed world four-fifths of people use the internet, while the developing world only a third do so.

A recent report from the Economist highlighted some of the problems besetting African nations. "In general the commercial links between African countries are weak," it said. "Only 12% of Africa’s trade takes place within the continent. In comparison, 60% of European countries’ trade is with one another."

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Politics can create other obstacles for infrastructure. Ranjbar’s own country of origin, Iran, has had a history of opposing technological progress, and only recently dropped legislation limiting home users to connection speeds of only 128 kilobits per second. "They said nobody needed more than that," he says. "My personal feeling is that it was related to freedom of information."

Ending the outages

Perhaps as a result of his experience, the chief information officer is hostile to the Government stepping in to strongly regulate the development of internet infrastructure. "The internet has been from the start a self-regulating industry and it has been very successful in that," he says. "By being a bottom up open transparent structure the whole model has lived very well up to now."

The current furore over net neutrality in the US, which is largely over the extent to which companies control infrastructure, reveals that not everyone shares his optimism about the self regulatory nature of the internet. If the actions of Netflix are anything to go by, at least one company is set to lose out in that row.

What is not in dispute is that everyone stands to gain from better internet access. The ease with which the internet goes is not only bad for business, but indicates a lack of interest in the region. However hard governments choose to regulate the internet backbone, better connections make for better business, and fewer outages.

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