Internet ecosystem evolution

23 October 2013 - A Workshop on Access in Bali, Indonesia

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Full Session Transcript

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>> MICHAEL KENDE: Okay. Good morning. Let's get this started.

My name is Michael Kende. I'm with the Internet Society, and this panel, Internet ecosystem evolution, was meant to be the third of a group of panels about exploring how to build up an Internet ecosystem and industry creating content and applications. The other panels were number 49, IXPs, building, sustaining and governing them, which will take place this afternoon at 4:30 in room 1. And that's organized also by ISOC. And two members of that panel are here and will talk a little about that.

And then number 215, encouraging locally relevant content to grow the Internet, which was organized by Disney, and a few of those panelists are here and can talk a little about that one as well.

This one is meant to build on those two, to talk about how to create and foster a broader ecosystem, which would be an industry that's creating content and applications and games to use the Internet and leverage all the assets. And the way that we thought about it is that the IXPs, the Internet exchange points, are used to localize traffic exchange and make it more efficient. Locally relevant content in the local language is of course going to drive usage because it's most useful to people talking about their lives and their culture. But then to really drive the content and applications to drive the usage, you can think about a broader ecosystem and you can define that in many ways, but that would be one that has the venture capital and incubators to develop companies on the supply side and good technical training to get people to be able to create those applications, and on the demand side, computer literacy, payment systems, and Internet access so people can get on line and buy or get access to these new content and applications.

So the way we'll do it is we'll have a brief introduction from each panelist, talking about the various pieces, and then we'll open it up for a general discussion among the roundtable and take questions from the floor.

And first to start the discussion on IXPs, we have Jane Coffin from ISOC to talk ‑‑ who is organizing the panel this afternoon on IXPs, and Mike Jensen, consultant, who has done quite a bit of work about IXPs.

So Jane, do you want to start?

>> JANE COFFIN: Good morning. Thank you for being here. We certainly appreciate the early morning participation. And I think we'll have questions after, yeah, Mike? After the panel discussion.

>> MICHAEL KENDE: Yes.

>> JANE COFFIN: Okay. As Mike said, the Internet Society does work on something called Internet exchange points, IXPs. It gets a little confusing because people often say ISPs, Internet service providers, ISPs will often connect and peer at an IXP in order to exchange traffic locally. We often say keeping local traffic local is one of the key things that builds up local. It brings down latency which is something that creates delays in the network so you want better quality of service. It helps with local content development because people see there's a value in that quality of service that can use that infrastructure more. They have a reliable infrastructure.

So we're promoting the development of Internet exchange points for both what we consider to be the human, the technical and the governance infrastructures. Over the last 20 years we've seen that formula as the key formula for development of infrastructure, the people, the technology, and the bottom up technical governance and human governance of that infrastructure.

So we're devoted around the world to working with local environments to bring in these Internet exchange points, and again it's a neutral meeting place where the networks come together to exchange traffic with each other. It is not easy to get people to come together that compete with each other. The hardest part we often say about bringing the IXP to a country is the social engineering, which is 80 percent of the work. Putting an Internet exchange point together is not difficult. It's a switch. There's some cross connects. It's a lot more complicated than I'm describing, but we could set one up here in a couple of hours if we had the right equipment and right infrastructure, but the harder part is bring those entities together to build out the local Internet infrastructure and that ecosystem of Internet pieces. So the IXP is not the one and only part you need in order to build that technical infrastructure. It is a part of it. It's a critical important part. Again it helps with local connectivity, better local connectivity, better quality of service, faster uploads.

We've seen mobile operators who connected to an IXP in the Democratic Republic of Congo had quality of service shoot up, volume of traffic shoot up in four hours after interconnecting at the IXP. There have been cost savings around the world in different countries, and we've been able to prove this causal nexus between economic development and the IXP infrastructure development. We have a report out from last year, May 2012, for Nigeria and Kenya and we worked with those IXPs to look at the traffic statistics, the interconnection there among different players and the value chain of the benefits from interconnecting and exchanging traffic.

Mike, my colleague, and I are working on a report and he's going to describe that report in a minute and some of the metrics we're looking at for really focusing in on best practices, so this is an easier to understand infrastructure. But again we want to create an environment where local people see the importance and ‑‑ of using that infrastructure because of the reliability of the speed, the quality, and the local content.

Again local traffic, local means you're not sending your traffic out to a third country to exchange it. If you don't have an exchange point in your country, one ISP is taking their traffic out to another country, bringing it back in to talk to the other ISP. It's very complicated if you don't have an IXP.

So we'll have a session this afternoon as Mike had said, and we'll dive deeper into how to create them, sustain them, and manage them.

The most successful models we've seen are the bottom up, community of interest, the Internet community coming together to sustain it because you really need the buy‑in from the local community.

The other key issue as I mentioned before is the human, the technical and the governance infrastructures, those pieces. Part of the Internet ecosystem that is often overlooked, because we are at a meeting like this and everyone's talking about different issues, one thing I want to hone in on is the human trust networks that are built when technical people get together and they see the benefit of that technology and how it works. Again it's seeing people together in the same room who are trying to build that Internet infrastructure.

We recently held a meeting in Morocco in Casablanca, it was African peering and interconnection forum. There are four like this around the world. Raj, my colleague at the end, we helped host Africa, which is another big meeting. He can mention that a little bit. Where people come together in the region to exchange ideas, technical understanding and learn more. Those are key fora. But at the African meeting we had over 30 Internet exchange point managers, operators, and networks, content developers as well, meeting each other, because if you're going to exchange traffic with each other, it's better to see each other to know who that person is and have a little bit more trust and faith in them. That's that human network of trust that can't be underestimated. It's been part of the core backbone of what we've seen on the Internet infrastructure development around the world in the last 20 years.

I'm going to turn it over to Mike now to talk more about it from a granular perspective, some of the work we are doing on this report that we're developing on best practices, but know that we work with local communities around the world to build up IXPs, but it's where people want us to be. As an Internet Society we don't try and impose ourselves on a community. They know we're a trusted neutral resource, with technical expertise, policy expertise, and local people on the ground speaking local languages. So there's a great opportunity, if you're interested in building out local infrastructure, to talk to some of our colleagues and experts where we do some in.

We also have programs where we bring in donated equipment, so that the cost of the startup is lower. We're very, very, very keen to make sure that when we go into a local environment, that we help look at the sustainability of that infrastructure we're bringing in. We don't recommend really high cost solutions. There are very low cost solutions to help you get started up, but we're cognizant of the fact that there is also that economic benefit of you sustaining that infrastructure so that we're not just giving you something that you can't sustain later on.

So we're very keen to work with that local environment, understand what the environment's like, and help create more Internet infrastructure.

>> MIKE JENSEN: Thanks, Jane.

Yes, as Jane indicated, we are in the process of developing an IXP tool kit which has two functions, I guess, really, is to help countries where there are no IXPs, which are about half the countries in the world still, get their first IXP going, and then of course, many of the existing IXPs are not operating efficiently yet or at the maximum of their potential to interconnect the local traffic. So the idea there is to help those ones get to the next level as it were and increase the ‑‑ their membership and the amount of traffic that they could exchange.

And then of course you can think of this as a single IXP in each country. Many countries actually require many more than one IX. Brazil has around 20 now, I gather, and of course the larger countries will have many more, but even some of the smaller countries will need ones in the secondary cities, and as the amount of data that is exchanged locally increases, especially in developing countries where this isn't the case right now but will be in the future, and the number of IXPs will have to go down to the tertiary level and even further, depending on the type of infrastructure available.

So we've been working quite a bit to try and develop an objective benchmarking process to look at the existing IXPs and to see what ‑‑ how efficient they are. So we're trying to, for example, look at the number of AS numbers that are announced, the number of prefix that are present there at the exchange, the amount of traffic that takes place at the exchange, and then some of the more operational features, such as the type of institution hosting the IX, even the physical aspects of the IX in terms of gaining access to it.

So many of those features to actually look at the existing IXs but then also to embed that in the environment that the IX is operating in in terms of the communications and Internet sector. For example, if there's a monopoly Internet service provider as there are in some countries still, there's actually not much use for an exchange or very little use for the exchange. It can't really upgrade itself. So we need to look at some of those factors, particularly around the dominance of incumbents, which often creates a big barrier to effective exchanges because they may not appear at the exchange if it exists, or they may limit the interest of other parties in actually getting an exchange going in many cases.

And then of course the national interconnectivity environment is critical. If there's only a single operator of fiberoptic networks in the country, then there's going to be more difficulty in rationalizing the need for an exchange because there's only one source of data, for example. Then at the local loop level, if there isn't a diversity of Internet service providers, then of course there's going to be less traffic exchanged. So there's many of those sort of direct ecosystem factors that need to be addressed to ensure that an exchange can be as effective as possible. And of course there are a number of indirect factors as well, such as the availability or reliability of electrical power, import duties or taxes on telecommunications, and Internet services also creates a barrier. And then there's a general policy environment around things like requiring infrastructure sharing amongst network operators or providing access to essential facilities by incumbent operators, for example. So there's a general policy environment that we're looking at to embed all of this benchmarking process to really understand what the environment is in the countries and what the factors are that need to be addressed to ensure that these exchanges are operating maximally.

Thank you.

>> MICHAEL KENDE: Okay. Thanks very much.

The next two speakers will kick off the discussion about locally relevant content and the importance in developing the Internet ecosystem in countries. The first will be Dorothy Attwood, senior vice president of global public policy for Walt Disney. And Janis Karklins, the assistant director general of communications and information at UNESCO. Dorothy will summarize briefly the panel from yesterday on the topic and then both can provide their perspective on the local content issues.

>> DOROTHY ATTWOOD: Great. Thanks very much and I really welcome the opportunity to give a brief summary of what we talked about yesterday. I think there was several of us were on the panel yesterday, so I won't completely redo what we had said, but we ‑‑ basically I think there are three observations that were useful for this conversation today. Overall there was a general recognition of the importance of the pillar of locally relevant content to the health and advancement and fostering of the Internet economy, so it's a ‑‑ it's almost taken for granted that people need to actually be interested in going on line, even when there's infrastructure in place. The content drives that interest, and in developing countries in particular, the content that is of new importance is locally relevant content.

So one of the observations that the panelists discussed yesterday was that what did we mean by locally relevant content, because there were multiple kinds of content, and we fleshed that out a little bit. We identified that there is user generated content, that there is content that relates to the local community. That's kind of news and information. There's content that relates to the cultural preservation of stories and culture that was exemplified by one of our panelists talking about the digitization and preservation of Balinese culture on ‑‑ it's not banana leaves. It's palm leaves. I don't know. I've got banana leaves in my ‑‑ you knew I'd say it too because I had it ‑‑ clearly I've had good food here too.

(Laughter.)

And as exemplified by that. There's the element of local content that is museum and institutional and educational in that regard. And then there's a wide variety of what I would describe as professional content. That is a burgeoning of locally relevant entertainment infrastructure in developing countries, and then there are obviously companies such as mine, Disney, that are involved with development of professional content that is appealing because it's in local language, et cetera, for developing regions.

So we talked a bit about the desire to flesh out the kinds of content that are of interest, but the overwhelming sense I took away from the panel was that all of those types of content were important to fostering the interest in the Internet as a medium for communication.

The second observation was that you had this wide variety of locally relevant content, but the key criteria really for success was quality content, and the quality element ties directly into what you're talking about in terms of the infrastructure, that is you need to have the ability to have not ‑‑ no latency. You needed bandwidth capabilities. You needed all the kind of infrastructure that will be probably more discussed this afternoon as well. But that clearly an emphasis on quality made a huge difference in the use in entertainment and enjoyment of the content. So that was an important element that came out.

And the final piece I think we discussed a bit was the need for economic support for locally relevant content. So you had a lot of content, you wanted quality content, but you also needed to have some economic viability and that that presented challenges in small communities with unique and individualized languages, but there was some discussion about the interests that global players are now having. There's ideas I know we're going to be hearing about the seed money and the venture capital and the interest that is now starting to develop in the private sector, and then there was some discussion about the role of government there. And Janis, you might talk a little bit about what UNESCO is doing obviously to promote that as well, but there was a discussion can government help this, because some of this kind of content, important, necessary in the public interest, but may not be economically viable, and nevertheless is very important.

So those were the kind of ‑‑ the three major messages I think that emerged from our discussion yesterday. And we can talk more about that later.

>> JANIS KARKLINS: So thank you, Dorothy, and good morning, everybody.

Speaking about the role of government and the interest of UNESCO in local content development, the interest of organization on these issues started already in early 2000, when our focus was more ensuring that more content in different than English language would be put on line, so that was initial drive of UNESCO, arguing or promoting multilingual content.

Then thinking of what kind of incentives governments may have in order to invest in local content production. We thought that economics or money talks the best with governments, and we started to think if there is any economic incentive or let's say positive correlation between development of local content, which is kept on local Internet infrastructure, and the price that local Internet users are paying for access to Internet locally.

And we commissioned a study, it was a study that was done jointly by OACD, ISOC, and UNESCO, and we analyzed the data ‑‑ first of all, we realized that there is not so much data we could rely on in trying to make this analysis. Nevertheless, we made some assumptions and used data which indirectly may indicate the volume of local content, and what conclusions we arrived to was that the Internet infrastructure development and local content development, they go hand in hand, and better infrastructure leads to a bigger volume of local content on it. We did not, though, prove the direct link between the access price and volume of local content, simply because we did not have sufficient or appropriate data for that.

Nevertheless, the middle piece which I mentioned, local content, local Internet infrastructure, and access price is very important. I recall talking to one minister of communications of one of the Northern African countries, and telling him about this study we did and the conclusions we arrived, and he said, no, no, actually that does not work, and I said why. Because in that country, local traffic represents five percent of all traffic. 95 is international traffic. And what is ‑‑ what was the reason, the reason was that all local content was kept on servers outside. And so there is a very really strong correlation between these local activities and ‑‑ in content production and development of local Internet infrastructure.

I would also argue in favor of local Internet infrastructure because apart from having physical machines, it also helps to create local knowledge base about Internet, which is equally important to run successfully Internet operations in a given country and understand how to improve them and risk challenges. If you purely rely on expertise from outside, that is maybe easy in the short run, but not sustainable in the long run.

And finally I would like maybe be slightly provocative, and you know that now there are a lot of talk about cloud computing and where these clouds should be and whether they should all be in the north where natural ‑‑ I mean outside temperature helps cooling machines or they should be based in every country, and so on, and what I hear all the time, that keeping information on the cloud is cheaper than keeping information on CPU. But what I don't hear in this debate, that moving those bits of information from the cloud to machine and back and most probably several times costs something, and how much that cost adds to this calculation, the cheapest and most efficient way. So that is the question. And most probably it would be interesting to look at how much moving bits of information from the cloud to machine and back adds to the cost of cloud computing and present the full picture. The argument is it is already paid by access, because this is sort of bulk which each Internet user is paying. Fine. I agree. Nevertheless, if you look from the point of view of rationality, then moving unnecessary bits that clogs traffic, and so we need also to factor in and argue that argument into discussion.

So I will stop here, and I will be happy to answer questions or engage in debate.

>> MICHAEL KENDE: Great. Thank you.

Now that we've explored the importance of locally relevant content, the next two speakers will kick off the discussion of how to jump start an industry that's creating it, not just the content but the applications and making it locally available and hopefully not on servers that are hosted abroad but within the countries so that it can be accessed quickly and cheaply.

So the two speakers that will start speaking about that will be Raj Singh, the bureau director for Asia for the Internet Society, and then Edward Chamdani, who is the cofounder and managing partner of a company called ideosource in Djakarta, which is a venture capital and incubator working on developing consumer applications, online consumer applications.

First Raj.

>> RAJ SINGH: Thanks, Michael.

So I'll make these comments from the perspective of other pursuits I have apart from ISOC, and particularly what I used to do before, which was doing start‑ups and trying to make money and not lose money.

So I've done start‑ups in several countries, and in various sectors as well, not just technology but agricultural as well as real estate. But let me talk about the technology piece here, or doing a technology start‑up.

One of the biggest issues we've come across or I've come across is, in two, maybe three countries in this region, which is where most of my work is, the issue is with capacity, and the capacity in particular, and also I think Mike and Jane alluded to the fact that you need technical skills to build and maintain and operate the networks, and also you've got your infrastructure in place, but you need someone to run those things as well, and they need to keep abreast with the latest development on what's happening, be it security issues or whatever else. So it's very important to be up‑to‑date, and of course in the Asia Pacific region in particular, they've got a great event called apricot, which brings together more or less about a thousand people every year from the region and from outside the region to discuss these very issues, and the great thing about that fora, talking about the network of trust and all that, is that they all ‑‑ a lot are from competing interests. They are from rival companies, but they sit together because they know they need to find a solution to the technical issues or develop best practices around those technical issues. So that's fine. I mean that's work in progress. That's happening.

What I wanted to actually refer to is the other part of it. So let's assume we have the infrastructure, we have some great content floating around. How do you then start ‑‑ how does then the business sector start capitalizing on that, and I think Edward will perhaps talk a bit more about the funding aspects and incubation, so I won't touch on those.

But what I will talk about is two start‑ups ago, when I started doing that one, we had a big challenge on our hands because these particular skill sets we needed to do the start‑up, we just worked for some companies in the U.S., but us from Asia, was that there was a skill gap between what the universities and colleges are producing and what we actually needed so a gap between what industry needs and what the academic institutions produce, and for that it became a very serious matter. In the end we just gave up to be honest and we set up our own training programs.

We also did something else slightly different, which was we stopped recruiting from universities. We went to the high schools and said any one of you want to come and have a go at building some interesting skills and joining a start‑up. We had quite a few hands go up. I think out of the first team of 40 that we recruited, a mixture of university graduates or others, I believe 12 I think were just out of high school. So they had not gone into a tertiary institution yet. They had just finished high school. They were looking at trying to figure out what to do next.

What we found out was when we took them on, trained them, obviously they had some IT skills and interest in computing and all that. We trained them according to what we needed done. And I'm happy to say one of those guys has today become a CEO of a company. He still doesn't have a degree. He's never gone through any formal education. And this stuff is picked up. So that's a great story, but that story doesn't repeat all the time. It's an extraordinary event maybe.

So one is that skill gap that we see between what academic institutions produce, what industry needs, and where industry is headed.

The other part of it of course is now assuming we have all that done, we've got all these great guys developing software and apps and the supporting systems and all that, but they need a market to sell to. The market itself must also have a level of literacy to be able to use and consume this content. Some people refer to it as computer literacy, digital literacy, whatever you want to call it.

The point I'd like to make there, I was in Nepal earlier this month co‑moderating a jury on digital content. And what became very clear there was you don't actually need pen and paper literacy to consume this content. The traditional definition perhaps of literacy is that you need to know how to read and write, but in the Internet age and particularly with multimedia and audiovisual, things that are available today, perhaps that approach is a bit wrong. Digital literacy or computer literacy doesn't really mean you need to know how to read and write. You need to know how to navigate a computer, press and click to start up content and so on. Of course you need to type in a URL, but let's not worry about that one. So that's one.

And very quickly two other things that I wanted to mention in terms of part of this whole ecosystem, assuming we have the capacity and the skill sets, the other problem we have, and I'm also part of a mentoring group, we try to help young start‑ups do what they need to do and see where they get. And often they complain. They say I've got this great idea. I know I'm going to do great with it, but no one else believes that. And I think in Asia, at least in some parts of Asia, there's this issue about the risk appetite. The traditional entrepreneurs have come from traditional industries. You have a farm, you grow stuff, you sell stuff, you make money. You have a factory, you make stuff, you produce stuff, you make money. But technology is a bit more volatile than that, particularly in the tech start‑ups, because there's no guarantee that the start‑up will succeed, and sometimes the weirdest ones succeed and the great ones don't. So that risk aspect particularly in the Asia Pacific is a concern as well, and we need to try and develop that mindset within the traditional entrepreneur community that have a go. Yes, 99 will fail, but maybe you'll have that one that does really well. So perhaps this is a change in culture and mindset.

And the last one I wanted to talk about was assuming all that is in place, you've got some great guys building apps and software and whatnot, there's also the issue of how people will pay for that content, assuming it's chargeable content. Most people in this region or a large part of them don't have credit cards or debit cards. A lot of them are from the unbanked sector. They don't even have bank accounts. But they still want to consume content. They go for the free content obviously because it's free. But what's the payment model, and particularly when we're looking at micro payments. So it's not even large sums of money. They're small amounts of money. Even that is not manageable, because sometimes to send $10 costs you 20. So that's also an issue as part of the larger ecosystem discussion.

I'll leave it there because I think Edward may have some great insights on that.

>> EDWARD CHAMDANI: Okay. Thanks, Michael, and I think very good point from Raj as well.

My name is Edward, and I'm from ideosource, and I'm running an incubator and venture capital based in Djakarta, but we are investing also in the region as well in Singapore.

The problem with the investment in start‑ups technology in a country like Indonesia is unlike in the Silicon Valley where we can invest, there are plenty of investment for start‑ups that has no track record, you know, no history. In Indonesia and also in the region, we as in venture capital, we need to take a look at the possibility to have a sustainable, you know, portfolio of companies. Why? Because we know like Raj says, you know, we cannot afford to invest in 90 companies or nine companies and then one, you know, flourish because the ecosystem is not there.

Unlike in the U.S., you have possibility to have multi players for the investment by a lot, but in Indonesia, usually the multi players will not, you know, be more than ten times, you know.

So what Michael, you know, asked me to do, you know, for this forum is that to cover a bit about what kinds of companies are being funded by us, and then what challenges do we face, and then policies and infrastructure that help the portfolio companies.

So the type of the companies that occupies first, I want to analyze on the Internet exchange that, you know, outside the IXP, which is a local. Like Mike mentioned, in Brazil, there are plenty of local exchanges. In Indonesia, there are actually two. You know, one is driven by associations called IG, and then the second one is neutral. It's called IDC. And there are plenty of ISPs residing in IDC because of price basically. And if we take a look, you know, I think 50 to 60 percent of the occupancies in IDC is ISPs, and the data is there, so we can actually capture who they are.

As far as the ‑‑ you know, within the ISPs, what type of contents, you know, reside there, I collected data of the trend in a consumer Internet based on the tech in Asia. If you go to techinAsia.com, 49 percent for the last six months, you know, Q2 and Q3, 2013, 49 percent occupied by e‑commerce players, and then 19 percent online games, 19 percent online media, payment, four percent, advertising network, around three percent, and mobile messagings and the rest, around two percent. So I think if we want to focus on, you know, local contents, you know, those are the bigger ones.

And why we don't see any on the social media is basically we know that Indonesia has around more than 50 million Facebook users, so basically while on the social media, there's no chance for incubators and venture capital to develop a local social media platform anymore, because, you know, Facebook has dominated already. Twitter is also in millions in Indonesia, very popular. Path is also coming up in Indonesia. So we see the trend of Facebook users used to be an AB segment, right now coming down to C and D. While the path is coming up, you know, because it's limited to 150. A lot of the maven and also the leaders that knows the technologies a lot, they go to path now.

So I think if you, you know, go deeper, for example, on the e‑commerce side, we have ‑‑ travel is very popular in Indonesia. Multi‑product e‑commerce site, very popular as well. Travel I think is around 18 percent or ‑‑ yeah, 18 percent. Multi‑product e‑commerce, around 17 percent. B to B marketplace, 13 percent ‑‑ sorry. Travel, 18 percent. Apparel, accessories e‑commerce, very popular, where they sell fashions and cosmetics, that's 17 percent. Marketplace, we have popular marketplaces in Indonesia, like Tokopedia, those start‑ups, and discount, like Groupon. We call these two in Indonesia.

So I think back to the ‑‑ those are the type of companies that are being funded and also we have planted in Asia.

Challenges we do face right now, especially in Asia, we don't have any government support. That's what we face right now. So some of our portfolio we actually incorporated in Singapore. Why? Because the tax treaty is much better. The investment environment is ‑‑ ecosystem is there. It's easier to set up a company. In Indonesia we need around two months to set up a company. In Singapore, just one day.

And then also the government support in Singapore, we have government support in the way of a fee scheme of investing $1 and the government invest $6. It's a very good attraction for investors to have this kind of scheme, you know.

And then quality of Internet connectivity is also a factor. You know, that's the reason also in Indonesia, more than 50 percent, close to 60 percent of online payment is being done off line, meaning that you click the shop card, and then you have to pay through ATMs or to online banking system. Unlike in the U.S., you know, you have Pay Pal. A credit card is common. Indonesia, credit card users is not that many actually.

So we face those kind of an issue in Indonesia with payment as well as logistics.

Okay.

>> MICHAEL KENDE: So thank you very much.

So thanks, everyone, for running through that. Now it would be good to open up the discussion, and first if any of you have any comments or thoughts on what the other panelists were saying, that would be great, just to get some reflection, and then I have some questions and of course would love to get questions from the audience. Does anyone have any comments or thoughts?

Mike?

>> JANE COFFIN: There's a common factor when we often speak here about multi‑stakeholderism and the multi‑stakeholder model and in some cultures using that word is a little strange, but let's just say many people and many stakeholders who have a role in the environment. Government is an important factor and we were just hearing different pieces about the challenges and the interface that you almost need to have with government. I think we often forget as the Internet community or the start‑up community or even if we're at UNESCO and other places, you almost are in a role on occasion of teaching government officials more about the ecosystem and the environment. I used to be a government official, so I'm not being disrespectful. But when I needed to understand more about technology, Internet exchange points, Internet addressing, I went to the people that knew more than I did, and it's very hard for some government officials to admit that they don't know something, and so you have to interface and I learned a lot when I ‑‑ I see a colleague in the back laughing.

We really do need to figure out a better way as the Internet community to get our message out about the great work that we do, the work we do together in partnership. This is not something we ever do alone. And you can see at this table, you've got a UN institution, a great colleague who's done more work on the different continents, Michael who is an economist, Dorothy who knows about a lot of different things from regulatory to other, Raj who's had start‑ups, Edward on start‑ups. We all are partners in different ways with different institutions and others and trying to not forget that how we interface with government officials and teach them if we can quietly without being disrespectful but also taking them out of their element so that they don't feel as though they're with their own colleagues and that they're embarrassed. Often you find that you have to have one‑on‑one sessions, and then you can figure out a way to be a better partner, but there's a way to try and create a non‑antagonistic environment and I think that's important because if we're ever going to get the policy environment right, the regulatory environment right, some of these things that probably make your head hurt if I talk about submarine cables in the back hall from the submarine cable landing station, if you don't have a liberalized environment with those submarine cables which carry almost all the traffic of the world with satellites. The Internet just doesn't run around in the cloud, right? The cloud is really submarine cables and other piece parts. You have to have a good environment in order for that submarine cable, the people who are involved in the consortium, to bring the traffic into the country at lower prices. We're talking about bringing the price of connectivity down because when the prices go down as the UNESCO report said, connectivity goes up, because people use it, the traffic goes up, volumes are up, the prices come down. Those are just facts. So if you can bring down that cost of connectivity, which is what we're trying to do with IXPs, which is what we do when we talk to other officials, if you bring the officials into that ecosystem, they're a partner, that can help. I think that's one of the key issues.

>> MIKE JENSEN: Thanks, Jane.

I wanted to reinforce what she said in terms of the cost factor. I mean developing countries, Africa in particular, you're looking at the average broadband costing 50 percent of the average salary. That's compared to two or three percent in Europe. Until we get that cost factor down through all of these different ecosystem aspects, we're not really going to see a lot of local content developed.

I just had an interesting observation about the issue about where the cloud sits and the cost of moving bits back and forth from the cloud in a foreign country, and I think the cloud should be seen as including the pipes going to the cloud, and clearly the economic imperative is such that people are moving their applications off shore as it were on to the cloud. And I think perhaps an interesting dynamic that has now reared its head this year is the Snowden revelations. Which have now increased awareness and interest actually in bringing those bits back into the country's cloud at any rate and not to see the cloud as some large dark entity somewhere else in the world, and I think that dynamic is going to have an interesting role to play in the coming short term future.

>> MICHAEL KENDE: Okay. Any questions for any of the panelists?

>> AUDIENCE MEMBER: I'm Pindar Wong, Hong Kong.

I'm very interested in the comment from the gentleman of Indonesia. Obviously you gave a very good set of reasons why certain investment in start‑ups hasn't happened. You made a comment about payment, I believe. It seems to me, you know, before the Internet, there was another network. It's also global. It also sort of shifts bits around. That's the banking network. So a lot of developed economies, who are not yet connected into the Internet, may not actually also have a banking network. So I'd be interested in your thoughts, but how are you going to solve that, because on the other hand you want to promote Internet. One great killer effort of the Internet is getting paid. If you can't route money, then is it only going to be a social thing? Because you can't develop your e‑commerce infrastructure if you can't get paid or you can't pay.

>> EDWARD CHAMDANI: Yeah. That's a very good question, and also many outsiders, you know, from abroad, coming to Indonesia, they're quite appalled by the nature of on‑line, you know. We know it's a 250 million population, but unfortunately we have more than 50 percent of unbanked people. It's not just because they don't have the money, but it's more like it's ten kilometers away to go to the bank, you know, so it's very difficult for them. So again connectivity is very important. Accessible to mobile connectivity is very important for the mobile payment. But it's not ‑‑ there is no one dominating payment system in Indonesia, so it's unfortunate.

Like I said, more than 50, 60 percent online payment is being done by, you know, mostly bank solution. You know, it's a bank centric payment system.

Fortunately most large banks in Indonesia, they provide plenty of options. You know, they have online Internet web based payment. They have a mobile payment system. Even in mobile payment, some banks, they provide a solution based on a UMB and also on the WAP. So there's plenty of options for this online consumer payment, you know. But that's also a problem. There is no common major, like in the U.S., that you can use credit card and credit card is a base. You can connect to Pay Pal. You can connect directly to many types of payment. It's centralized.

So in Indonesia, what happened, it spurred a lot of ‑‑ a variety of payments, but the volume is big. It's huge. If you take a look in one of the articles of tech in Asia, basically right now, you know, people from abroad begin to understand. The volume of online transaction is a lot. It's also increasing. And no dominating payment system is, you know, exists in Indonesia right now.

I hope that answers your questions.

>> AUDIENCE MEMBER: Thank you. I think the gentleman from the W3C web payments group is here. The WC3 I think tries to develop web standards and that may be something interesting to follow up.

>> RAJ SINGH: I just wanted to add just on this payment issue, in India there's a company called flipcard.com, which is a really dominant player in that landscape. So they have an interesting payment model. It's called cash, and specifically it's called cash on delivery. So you go on line, you do your goods and services, whatever else you need. They'll ship it out to you. They'll knock on your door, hand you the goods and ask for the money in cash.

The problem was, I was just talking to one of the guys recently, they said we actually stopped offering that service in certain parts of India. I asked him why. He said it's pretty simple. The people order what they want, it arrives at their door, they haven't actually seen the product before, they open it up, look at it, they don't like the color, they don't like its look or feel, and they return it. They said sorry, we don't ‑‑ because it's part of the return policy, that they'll take it back within whatever days it is. So now they've started demarketing the country into areas where they will not offer cash on delivery or COD.

It was just a response to your question of what is another payment model. There's still the old cash payment model, but obviously that has some challenges too depending on what the customer is doing or not doing.

>> DOROTHY ATTWOOD: I guess I would just add that I don't think we should think narrowly just about payment methods, but I think we have to think about trusted environments because you can see one of the limitations is the inability of banks to believe that they're going to have the capability to avoid fraud, and so you're not seeing ‑‑ Africa has a real huge issue in this respect. You're not seeing some of the multi‑nationals that could actually offer some micro payment alternatives and platforms entering some markets because of their perception that there aren't mechanisms in place to avoid fraud and security issues, and so I think that's one of the things we can work on from an infrastructure perspective, to add the security element that could in fact encourage some other different forms of payment methods beyond the issues of micro payments and that kind of thing.

>> AUDIENCE MEMBER: Thank you. And if I can ask a follow‑up question on that. In many developed countries, there's advertising supported models, certainly for content, not for e‑commerce, but maybe we can talk a little bit about if those markets are developing or if those possibilities exist on the content side for gaming and for other things that are typically or can be advertising supported.

>> EDWARD CHAMDANI: Yes, I want to add a bit what happened with the local content, also content from abroad in Indonesia. If you see that Facebook, they have more than 50 million, but ‑‑ and also gaming, like in IT. It's very difficult for Indonesians to actually buy items on credit. So what happened is that Indonesians, they love free contents, you know. So I think we need to focus at the beginning to see more networks, to capture those online users, so we actually monetize from the other side, you know. We don't charge that to the consumer, but actually brands or other advertisers would pay for that, you know. That's one way.

And then it's also ‑‑ I want to say something I forgot. But we see one of my portfolio, for example, they develop a lot of good content in gaming, and because of the ease of monetization in Indonesia, so they go abroad, so what they do is they use publishers like Google app stores, to monetize, and then they collaborate with local publishers in China to publish their game, localize the games, as well as in Korea and Japan as well. So that's what they do as a local content provider.

But for local content itself, the ecosystem is not there yet in Indonesia, so it's difficult for content owners to monetize in Indonesia.

So what we do right now in ideosource is we actually entice our portfolio companies to create a platform whereby their expertise, you know, with connecting with the app networks and everything, so there's a way for these developers in that ‑‑ with our portfolio companies, SDK, as a wrapper with all the connectivity to the app networks there, so they're able to monetize technically from day one, when they use this wrapper, you know.

>> MICHAEL KENDE: Okay. Thank you. Any other questions?

>> AUDIENCE MEMBER: Christopher Yu from the University of Pennsylvania.

This conversation to me strikes me as very important, but it reminds me very much of a fixed line world in a world where the ecosystem is moving towards wireless, and I'm wondering if you could comment on ‑‑ in the world where LT isn't deployed, the old wireless world was still circuits which legacy telephone based technologies and bypasses a lot of this and I'm wondering if you could expand your remarks ‑‑ if any of the panelists could expand their remarks, to understand how as things have become increasingly wireless, particularly in the hiatus between a full LT deployment in a lot of the world, how you see ecosystem evolving.

>> DOROTHY ATTWOOD: I would make just one comment from a content providers perspective, it's not just moving to a mobile environment but it's moving to a smartphone environment, so right now you're still limited to the feature phone environment in many of these locations so that limits the richness of the content that, you know, we could do, whether it's interactive or, you know, in a game kind of environment. It also goes to the issue of advertising supported models, because the feature phone doesn't have that same ‑‑ it's much more subscription based, you know, than it is having the kind of multimedia rich content.

Now, we're moving rapidly toward having those kinds of devices become more, you know, more accessible. I think you're also seeing government policy encouraging that. You know, you see tablets being offered in educational content ‑‑ for educational content of schools by governments, but I don't think it's as simple as mobile versus fixed. I think there is an equipment element to that, as well as an infrastructure element, and until you see that, I know from Disney's perspective, there's a big question, do you build for a feature phone or do you build for a world even though the addressable market right now is quite small, using Indonesia as an example. But I think that is a gainer as well.

>> RAJ SINGH: I just wanted to add, so on this issue of LTE and other emerging technologies with wireless, you know, I think there's a policy issue around that too, and in particular let me go further to say it's actually a tariff issue as well. In the couple of countries I reside in. Two in particular have both gone to LTE or introduced LTE networks and the subscription rates are ridiculous. Yes, it's fast, right. But why should I pay five times the amount, you know, and when I'm really not going to be consuming all that much more. It'll just get to me quicker maybe. So I think that's also an issue, and of course what perhaps makes that situation worse is because a lot of governments have been auctioning off the spectrum at equally ridiculous rates and obviously there's an overhead. That money has got to be recovered somewhere. It has to come from subscriptions. So I think there's also an issue there, that the technology is great, but I think we have a few obstacles on the way in terms of regulatory and the tariff environment maybe.

>> JANIS KARKLINS: I may say that at UNESCO we see many ministries of education see a great potential in mobile technology and tablets. There are now concepts emerging, like school in the box, if I may say where tablet is at the center, which is a very powerful computing piece, but lightweight, you can upload all educational content, you put a solar battery next to it and an off the shelf projector, put a white sheet between branches somewhere, you have a school. Of course this is a technological part of it and you need to have a trained teacher, but nevertheless the tendency is to explore the potential which gives these mobile devices for education, and at UNESCO we're working with technological companies, and once a year we're organizing so called mobile learning week, where companies are coming and showcasing the ‑‑ their products, they're exchanging information, and they meet education professionals, so that I think this is the one trend which we can say exists now.

>> JANE COFFIN: Also in response to your question, this may seem a very granular answer but it goes back to a point that I think Dorothy was making about equipment. It's one of my big issues these days because we're trying to move some switches and routers out to help build Internet exchange points. The customs duties, the taxes for equipment are killing us. We're a nonprofit. We're sending donated equipment to a country. It's new. Also used is still pretty good. So take that there. But this is an issue where if you're an innovator or a small business, you too can try and push. It's that push pull with government and others. If you can't get that equipment in and it's held in what I call jail at the border, it's really complicating your ability as a country to move to that next level, we call it leveling up. For example on the spectrum side, if you're working, you can't get the equipment in to facilitate the business, and/or the entertainment or something else.

So as we're saying, there's that whole ecosystem of different issues, value chain.

Michael, before he came to the Internet Society, was at Analysys Mason, helped us with a report called removing barriers to connectivity, and Raj and I are thinking of trying to do one here in different parts of Asia, where we take a look at different pieces of the system, whether it's government and their investment policies and attracting investment, is it the policy regulatory, the tax, other Internet exchange points, but different parts of that system that you can help alleviate, and sometimes you just do have to shine a light through a report or others or panels like this where you can pull apart those different factors, which might help.

>> MICHAEL KENDE: Any other questions? No?

>> AUDIENCE MEMBER: Okay. My name is May Ann, and I'm an IGF ambassador from Singapore. Thank you very much for the panel. I realize the panel spans quite a large range of issues and I was trying to take notes because I think Michael requested for some assistance there.

I'd like to make a comment on the idea of entrepreneurs. We've covered things like developing local content, payments, and supporting of start‑up ‑‑ the start‑up community.

I think that for the ‑‑ from my point of view, where I'm seeing it, because I do work in computing in Asia, I think that the next development for business and sustainable entrepreneurship will be from the small and medium enterprise units. I think everybody pretty much agrees with that. In Asia especially, 99.99 percent of all businesses are small and medium enterprises, however you want to define that, in terms of revenue or in terms of employees. And we're seeing some leap frogs happening in the world already.

So for example we were talking about problems with payment. Kenya is a great example that's been used all over the world. My company has done work in Mongolia, in Indonesia, as well as we've recently concluded a study in Sri Lanka on the unbanked and the under banked and how they can use not just smartphones.

I know Dorothy mentioned that we're moving into a smartphone community, but I think there is also a place for feature phones, because you've got the codes that you can use to transfer money. So you've got these mobile banking opportunities that have sprung up because of a gap, and that's fantastic.

The real issue, and I think ‑‑ I think that the ‑‑ there are opportunities there that are yet untapped, so that's number one. The payments issue is readily available, I think, and ready to go.

There are regulatory barriers that have been flipped up, because I think the people most well connected would be the telecos, but telecos don't have a financial license. That's a regulatory barrier for them to entry. So you've got the infrastructure ready. It can be done. Regulation hasn't caught on quite yet. So that's for payments.

For content sharing, we're seeing a lot more new services being made available. Pandora was the first thing that started with Internet radio and now we're seeing Spotify come out with this idea of content sharing. So you have access to content, the selling access, the giving away access to content, but you buy access again on the smartphone and the mobile world, and that's based on a subscription basis as well.

I'm from Singapore. I don't actually have Netflix available to me yet. That's very sad. But here we're seeing another development. Education and books. I think there is a new start‑up called oyster which again comes up with this idea of content sharing and access to content in a library format rather than buying the book. So there goes your Amazon mobile of actually buying things. And again from Singapore, even though we're fairly well connected with payments and with infrastructure, we can't actually buy the books because of geographical boundaries that exist in the wired world. I think somebody mentioned we're moving from a wired world to a wireless world.

So for me I think that the support of start‑ups is quite essential today. So what you mentioned about the comparison, you know, why you do this in Indonesia, because there was more support in Singapore, that was very interesting to me.

I'm personally working on a 14 country study of SMEs and cloud computing and the government policies that are supporting start‑ups and SMEs in these 14 countries, and that's coming up soon. Probably next year. So if you want, I can share that with you.

But I think again the corollary to all of this great positiveness is that we have ‑‑ I always find it interesting to note that reducing barriers to connectivity, increasing globalization, allowing people to move on line and access content that's not available in their own country, well that stymies the local content development. If I can get a book off Amazon, if I can get something off Amazon, why do I want to buy it from my local store, or if I can read something that's available on the ‑‑ in the national website, why do I want to make sure that I can ‑‑ why do I want to read it from a locally hosted server, for example, even though it may be the same thing. There are some issues there which I haven't quite thought through yet. I don't think that we ‑‑ that we've gotten to the point where we can actually see, because I think we're still focusing on infrastructure development, and just making sure that everybody's connected first, but I see that as an upcoming issue.

Thanks.

>> RAJ SINGH: I just want to go back to the payments issue, and I really do believe one of our greatest challenges right now particularly in the start‑up economy, let me call it the start‑up economy, is the micro payment issue, and more so the cut when you buy or sell something. Or when you sell something, I should say. Be it Apple, which has its own rather high margin cut, or be it the third party providers, which also have a pretty significant cut of what you have. And if you're selling something for $2, an app, let's say, you know, if 60 cents out of that goes away to someone else and you're left with $1.40, then you've got the overage to pay. Sure, if you have volume, if you have a million people who use the app, great, but there are not that many apps with a million users. You know, you're in the thousands maybe or tens of thousands at best.

So I think going forward in terms of how we can further develop the complete ecosystem, I think micro payment model I think is going to be quite critical for our future success. I just wanted to sort of emphasize that.

>> EDWARD CHAMDANI: Yes, it's very true on the payment side to leverage the content. Basically we are in discussion with Japanese venture capitalists as well whereby in Japan, they have a platform, I forgot the name, but it's probably ‑‑ I mean the platform that they have is actually integrating the teleco with the banks, so the bank and teleco work very closely, and the regulation allows that. So what they take from the content owners is only like seven percent to maximum ten percent. So that's why we see a lot of contents in Japan, and the consumers actually buys a lot of it.

While in Indonesia we collaborate with telecos for the payment, which is the easiest one to cut the balance from the credits. It's 60 percent, 40 to 60 percent depending on the content providers. But we are seeing right now telecos trying to move to other type of payment that regulators allows them to charge, you know, for example, and in a telecom sale, they have T‑casts. In excel they have excel 2‑9.

But the issue is a lot of with the adoption is because of the regulation, KYC, know your customers. They find it very difficult to have an adoption. So it's back to the like mentioned by ‑‑ you know, it's not a matter of not having the technologies, but, you know, making a platform popular basically.

>> DOROTHY ATTWOOD: And I guess I wanted to comment on your trying to figure out the difference between content that is globally sourced and local content and how does that work, and we talked about that a bit in the panel yesterday, because there seems to be some perspective that there is a tension between the support for locally relevant content that may be ‑‑ that may be appealing to a niche market and content that may be of a global interest. I'll use a Hollywood movie versus a local story. And, you know, my perspective is that there is no tension, that there is in fact a desire for both, and that the capacity that's built in order to create compelling content, that is an environment that is encouraging of creativity that is in fact expressive ‑‑ richly expressive. It's not censored. It has appropriate licensing and IPR, intellectual property protection or anti‑piracy measures. Those kinds of things are necessary for both kinds of content on all kinds of content and in fact what the Internet platform does is enhances the ability to create different communities that may support a business model that in the physical world wouldn't be supported. So we were talking at ‑‑ the panelists were talking before we started the panel about the interests that, in either language or culturally, small groups can find content on the Internet that they couldn't before, which creates markets, which actually allows a global distribution. If it's an Indonesian story that would resonate with Indonesians in the U.S. or in Africa or in Europe, that's more likely now to see the light of day than had there not been a platform that would allow that, because of the diaspora, because of the effect of being able to have communities find that kind of content.

So while there is some commodification, I don't know if that's a word ‑‑ is my economist, I need to have ‑‑ making the ‑‑ while there is some concern that you create commoditization, some concern that you'll go to the lowest price point for some, I think that when it comes to content, the differentiator is in fact the uniqueness of that story and the quality of that product, and so I don't see the tension. I think that's a ‑‑ but it's an interesting ‑‑ it's an interesting question to kind of solve.

>> JANE Coffin: About that local content issue, we're seeing fabulous diaspora related business coming up where say in Nigeria, there's something called Nollywood. They copied Bollywood, which has been a wildly successful venture in India for movies and other. What Nollywood is doing in a small company ‑‑ not a small company now, but before called Irocu, which is based in the U.K., would be in Nigeria if they had better local network capabilities. They're working with us on some of those issues to talk about infrastructure development. But they're building up the sports, entertainment, and music industries in Nigeria and they're producing local films, which are being sourced in Nigeria, but requests for that content are coming from all over Africa, and all over the world, because you have pockets of the diaspora outside that.

And I know the local content in parts of Latin America is being built up. Columbia itself wants to become more of a movie center or a content generation center. So you're seeing different businesses start up with diaspora pulling it, and that may be an interesting subsidization issue where you're getting the diaspora helping keep the small businesses and the start‑ups going.

And the other thought I just had when we were talking about local banking, the Grameen Bank had this great model with local banking, loyalty to that local bank and mobile, so there's a potential opportunity there for that interface, a great business opportunity quite frankly with the local banking, the mobile banking, and some of what you're doing as well in the content generation in a small company buildup.

>> AUDIENCE MEMBER: Thank you for such a great panel. My name is Bouziane Zaid. I'm a university professor, and I'm here part of the delegation of freedom house and I live and work in Morocco.

Just a couple of comments about the idea of local content. In developing countries, non‑democratic countries, the issue of local content is quite political in nature. Now, the print media and broadcasting in particular are quite controlled by the states. There is a lot of repressive laws that govern print and broadcasting. Online media becomes this new sphere, this new public sphere where people can actually say things, and not only that, but as we've seen with the Arab spring, how Twitter and Facebook were very instrumental in educating, organizing, and mobilizing people. It wasn't the reason why the Arab spring happened, but it helped a lot.

What you mentioned about traffic happening, most of it happening overseas, because most of the local content is hosted in servers. It's really for political reasons. People wish they could host their servers at home, but they can't because of the amount of control the states have over the ISPs, the Internet service providers, which of course allows them direct control over traffic within the country, so that's why they go overseas.

So I mean I like the discussion about the technology and about the innovation, the business models, but I think when it comes to developing countries, not democratic countries, the power of the Internet in pushing for democracy and pushing for a better life, because it's not all about money and economic prosperity. It's about the right to express yourself, the right to have your voice heard, the right to have an impact in the political progress, and we've seen that happening. We're not saying the West have to help us do this. But it's important in discussions about technology, that the focus is also on that potential of the liberating potential of the media ‑‑ of Internet.

Thank you.

>> JANIS KARKLINS: I think that rights existed before. There were very limited opportunities of self‑expression in many countries and indeed Internet provide that opportunity and liberate and gives voices to those who were never heard.

Humans always have been socially active and wanted to communicate. And myself, I'm coming from Latvia, and Latvia, 20 years ago went through the process of social transformation after collapse of the Soviet Union, and it was a very interesting discussion with the one editor of newspaper in Russia. He said in Soviet times, there were thousands of letters of readers to the newspaper expressing different opinions and anger and joy and so on, and that was editor in chief who picked one, two, three and published them every day in the newspaper. He said today, nobody writes anymore, any letters to the newspaper, but everybody has its own blog. And so that is the difference. The point is people always have been socially active. The Internet provides really a very good platform for self‑expression, and so that is indeed a very big advantage, and thank you for raising that issue.

>> MICHAEL KENDE: I think we have time for one more question. If not, I'll just maybe ask a final question and people can comment on it.

So Janis talked about the first OACD‑ISOC‑UNESCO report and that there's a correlation between access and local content. And, you know, I understand it's very hard with the numbers, there's not enough data available to really, you know, say definitively what drives what, but I just wondered if people had thoughts about whether more local content will drive ‑‑ will get more people on line, because there's clearly people who ‑‑ you know, there's many people who could have access to the Internet that aren't for various reasons. Or the other way around, will the more users come on line, will it naturally bring out the opportunities for more content, or is it really a kind of a mixed thing? So kind of which way ‑‑ what's driving it, the content or the users?

>> RAJ SINGH: So, you know, I think ‑‑ it's an interesting question. I don't think there's one straight answer to that. But I think what is required is a critical mass of users to be able to support local content. What that critical mass is I think depends on the market itself. For a large market or a large language base, let's say, ten percent of that language base could be a sufficient enough market, but for a very small language base it may require 50 to 80 percent of that population to be on line and fully connected to be able to then support a local content ecosystem.

So I think it's reaching a critical mass. I think in many instances we are near that critical mass in most countries and even in the countries that are not at the critical mass, people want to be part of that critical mass. There's a desire to be connected and to be on line and to do things. The content piece itself, you have what I would call popular content which may not necessarily be local. It may be Bollywood, Hollywood, Nollywood, or Disney.

>> DOROTHY ATTWOOD: Or all of us.

(Laughter.)

>> RAJ SINGH: Yes. And I'm waiting for boats and trains, cars and planes.

I think it was you, Janis, who said when you buy a newspaper, on the panel yesterday, the first couple of pages are all about local news. You get to the global or international news on the fifth or sixth page, and I think that's very true. Once people are on line, once they're accessing this off shore content, there will come a time when they say okay, but what's happening locally, and therefore they will also start using the local content.

>> DOROTHY ATTWOOD: I guess I would make an observation too. I think as an industry, the content entertainment news, it's ‑‑ it is a rise to quality. It has to be because people don't spend money if they're not interested in that as an entertainment value. They don't stay reading a story if they're not engaged, and I think that that actually tends to create the ‑‑ if the capacity is there, the interest only grows. New business models are created in order to access that content. New kinds of content are created by virtue of the capability, the technology capabilities, whether it's an interactive content or a grouping of being able to watch a program around the world with friends, real time. That's all now coming to fruition. They call it the second and third screens, because of the new technology and new capabilities. So I do think content has a unique role to play in driving the interests and that itself, because it is quality based or typically is quality based, if you don't like the programming, that tends to encourage investment, encourage entrepreneurship, encourage new types of business models like Spotify and Netflix and a global audience. So I think it's a truly a virtuous cycle of one creates more interest in the other and all three are necessary.

>> JANIS KARKLINS: I would argue with language issue. I think language might be a barrier to access information. And if information is not available in the language that person masters, so automatically that excludes him from being on line and taking part in this process. That's why also local content most likely will be in local language, and so that will drive up the potentially Internet users.

Second aspect is education. We see that if we take back ten years, when WOSS started, the main objectives that were put forward as a result of the discussion was connect schools. Today we see that majority of schools are connected and also we've seen that there is an exponential growth of use of Internet around the world, and one can think that, let's say new ‑‑ young population is the one which really drives the growth of the number of Internet users. We hear stories that kids are spending every penny they get to get on line in cyber cafes and so on, and again we need to pay attention, what kind of content they access and if there is not good quality content of different character, entertainment or education or cultural or whatever, so then of course the next is they get what they can get, or access what they can get. The quality of the local content also is an issue.

So I think we cannot say that one drives other or vice versa. I think this is a sort of mutually reinforcing movement, and more we have users, more content we need to have, and certainly more content we will have, more curiosity will have from people and they will start using if they are not using until now.

>> EDWARD CHAMDANI: Yeah. Local content, the way I see from the ecosystem is, you know, having this forum right now is very good. I have a chance to meet up with Dorothy from Disney. In the past, one of our portfolios is cooperating with like Nickelodeon is based in Singapore, a licensing business, so basically we license the Sponge Bob characters and we develop games, so this type of things is very good, because we know there's a market already for that. So collaborating with a good brand, established brands, and also channels that is established already. For example like top line. They have actually tapped into the Indonesian market in a way that they create local characters and they sell emoticons basically and it's a good way for them to actually sell and monetize the platform. And I think path is doing the same thing. They're selling emoticons. I don't know. Indonesians love it.

So yeah, we need to also collaborate, I think, with a lot of established brands, established like companies like Disney and Nickelodeon and others. Just from my point of view. Thanks.

>> MICHAEL KENDE: Okay. That wraps up the time, so the last thing is please join me for thanking the panel for an excellent discussion.

(Applause.)

(End of session.)

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This text is being provided in a rough draft format.  Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.
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