The Internet Society has released a report which summaries that local internet hosting is key to the development of the Internet ecosystem in emerging countries.
In majority of developing countries and emerging regions, the vast content accessed by local users is hosted abroad. As the content must traverse often expensive and sometimes under-provisioned international links, this can have a significant impact on the economics of access as well as the user experience.
“The lack of locally hosted content can have significant impacts on the entire Internet ecosystem in a country,” writes Michael Kende, ISOC’s Chief Economist and co-author of the report. “First, accessing any type of content abroad can be very costly for ISPs, and therefore, international links are often under-provisioned, resulting in slow access times that limit usage. Second, these increased costs for accessing international content are passed on to users, with high prices limiting usage. Finally, these limits on demand will, in turn, restrict the creation of further Internet content, keeping the entire ecosystem underdeveloped.”
The report, “Promoting Local Content Hosting to Develop the Internet Ecosystem,” co-authored by Kende and Karen Rose, Senior Director, Internet Society’s Office of Strategy and Research, uses Rwanda as a case study in exploring those dynamics, working in close partnership with the Ministry of Youth and ICT (MyICT) in Rwanda and the Rwanda Information and Communication Technology Association (RICTA). While focused on Rwanda, the situation there is common in many developing countries.
Almost all of the commercial websites in Rwanda are hosted abroad. A small savings for the content providers in hosting it abroad results in significantly higher costs for the ISPs to access the content. For one of the larger Rwandan websites that was examined, the content developer saved $111 per year by hosting overseas, while it cost the Rwandan ISPs approximately $13,500 in transit costs to deliver the content from abroad to local users. This impact is limited, however, because the websites hosted abroad suffer from high latency, which reduces usage.
The delay experienced by users in Rwanda to download a webpage can frequently be five seconds or more, and this can increase for webpages composed of multiple elements. The cumulative effect can make the overall Internet experience slow and frustrating, with a corresponding negative impact on usage. This can also limit the viability of interactive and data-intensive services such as gaming or video streaming, which depend on low latency.
The Minister of Youth and ICT in Rwanda, the Hon. Jean Philbert Nsengimana, “The Rwandan Internet environment has seen impressive growth in recent years due to the commitment and involvement of a range of stakeholders, including an enterprising population and business community, dedicated technical community, and strong policy leadership throughout the Government of Rwanda.”
While local content hosting is a key element for creating a vibrant local Internet economy, the report notes that the focus for policymakers, companies, and content entrepreneurs, should be on creating a positive enabling environment that will incentivise local hosting and service development and thereby offer content providers a local choice, rather than imposing measures that artificially require local hosting.