As the South African government leans towards net neutrality - following in the steps of the US - there are fears such a regime could stifle further contributions from the Internet economy.
According to the Internet Society, the Internet economy only contributed 2% to SA's gross domestic product (GDP) in 2011, a figure that is expected to reach 2.5% by 2016. However, the average contribution of the Internet economy to GDP in the most advanced economies, such as the US, in 2010 was 4.1%, which is expected to grow to 5.3% by 2016.
The average for developed markets was 4.3%, growing to 5.5% by 2016, and for all developing markets it was 3.6% in 2011, which is expected to grow to 4.9% by 2016.
This lag comes despite SA's status as an Internet forerunner in Africa, with the first network in Sub-Saharan Africa arriving in 1988 at Rhodes University in Grahamstown. In 1991, the first data packet transmitted from Sub-Saharan Africa was sent from SA to Portland, Oregon, notes the report.
The Internet economy's contribution to overall GDP is set to be further hampered if SA chooses to follow the net neutrality route, says William Hahn, communications analyst at Gartner.
Joe Mjwara, policy review head at the Department of Telecommunications and Postal Services, reportedly told a Parliamentary Portfolio Committee that SA is leaning towards net neutrality.
Democratic Alliance shadow minister of telecommunications and postal services, Marian Shinn, says Mjwara's comments on net neutrality stem from a recommendation in the ICT Policy Review report. This policy will inform the drafting of a White Paper that is due for release at the end of this year for comment before legislation is written up. Shinn says the policy review favours net neutrality, but "there will no doubt be much discussion on these issues before any decisions are made and regulations put in place".
Internet contribution
Hahn says net neutrality could hamper the growth of the Internet economy. He explains the use of zero-rated pricing and sponsored data are two ways to give users cost-free access to content. Either one could fall afoul of legislation or regulations aggressively favouring net neutrality, he adds.
Shinn notes net neutrality is a necessity to redress the imbalances of the past because of SA's history of exclusion of the majority of its population from the mainstream. "The Internet is a powerful medium for enabling all those living in South Africa to use the opportunities offered by Internet products and services to enrich their lives."
Shinn adds the Internet should be contributing more to the economy, but has been hobbled by the lack of widespread electronic communications infrastructure and the "interminable" delays in releasing high-demand spectrum. "The government is solely to blame for these major inhibitors to our Internet economy and citizen inclusion in it."
Hahn says the Internet economy could do "even more" to stimulate growth in SA than it does in most other countries. He adds one of the issues is that penetration, which the report puts at 49%, has been held back by high cost and relatively low availability of high-speed Internet in SA.
SA's pricey broadband access led to a predominance of mobile technologies for many, who never end up experiencing fixed speed and quality of experience, he explains.
Hahn notes one important aspect of the Internet economy is that end-users can become content generators, or even content providers. "If my neighbour pays R200 more per month, gets twice the download speed I do, and uses it just to consume clever cat videos faster than I can, that's hardly a digital divide. But uploading e-books and selling them from a personal Web site, or practising an instrument live via video conference with members of a band, these are more economically productive uses (or perhaps uploading clever cat videos with ads)."
In addition, comments Hahn, users need to become familiar with high-speed Internet before their ingenuity can come to bear. "The experience must be reliable and the costs not just cheaper, but easier to understand," he notes, referring to how much a megabit will cost, and what Internet experience it will allow for.
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