*Draft: Pathway to Peace through the Digital Divide

Laura Mueller-Soppart
Northeastern University
Capstone Political Science 2013
A Path to Peace between the Digital Divide:
Why quality Internet access is critical to economic stability
through the lens of electrification trends
Abstract
Peace is derived through predictability, when society can rely on knowing tomorrow will
be at least as successful as yesterday, the incentive to dissent is low. Security, society,
politics, and economies are critical components to peace. This paper takes the perspective
that economic stability is the most fundamental to maintaining stability in all other
components. An increasingly important variable in the global economy is the Internet.
Since the Internet is not owned by a single entity, rather it functions through a diverse
network of computers, the evolution of Internet access must be handled thoughtfully in
order to avoid deepening the digital divide. The evolution of electricity access is a strong
parallel for business leader, policy makes, and consumers to reference because of how
critical electricity and the Internet have become to economic activity, modern society and
therefore critical to peace. The author finds that standardization, quality access, and
abundant supply are critical to the ongoing successes of electrification efforts, and have
the same opportunity for success in the effort to achieve universal Internet access.

2
Introduction
Global society has witnessed many transitions from conflict to peace. The
components to a sustainable period of peace are endlessly interrelated. In the several
decades after the end of conflict eras, from post colonialism to post revolution, the spread
of peace in developing nations has been particularly complicated. These nascent nations
exemplify the importance that all components of peace be strong and stable.
There is a security transition. Crime, violence, and corruption are answered by a
rise of public security and adequate institutions for enforcement. There is a political
transition. A body of rules stands against violations of human and economic rights and
encourages inclusive governance. There is a social transition. Ethnic, religious, sectarian,
class or ideological confrontation that leads to internal conflict, often with regional
implications, must give in to national identity so that all can live with each other and
address future grievances through peaceful means. There is an economic transition.
Mismanaged and illicit economies give way to stable and functioning economies where
all citizens have the ability to earn a living wage. Each of these components is necessary
for the others to thrive.1
Much attention is afforded to the security, political, and social transitions at the
expense of the economic transition. The economic component is the most crucial for the
individual. Economic stability is fundamental to the rest, because peace has economic
consequences.2 Peace is established with either short- or long-term goals. If the short-term
goals, such as food aid, are not complemented with long-term goals, such as
infrastructure, peace is unsustainable. How will that society be able to transport the food
1 http://unidir.org/files/publications/pdfs/building-peace-and-stability-through-economic-reconstruction-en-
2 Keynes, J. M. (1920). The economic consequences of the peace,. New York: Harcourt, Brace and Howe.

3
it will one day create for itself? For example, after the “economic reconstruction” of
Africa in the 1960s, many nations were left with aid dependency (20% to 50% of GDP).
These nations also have some of the highest levels of internal conflict.3 Without clear
avenues for autonomous economic empowerment, citizens will lose faith in all other
institutions to protect their rights.
To continue with the example of Africa, it is calculated that the continent’s
significant lag in economic development can be attributed to its poor infrastructure.
Among poor societies, the power sector is lagging the most in terms of generation
capacity, electricity consumption, and supply security. The electrical power infrastructure
deficit accounts for two percentage points of lost per capita GDP growth.4 Now these
countries with poor economic growth face wider and wider infrastructure gaps to bridge;
this widening gap ultimately threatens the achievement of social and political
development goals.5 Many studies prove underinvestment in electricity infrastructure as
the cause for Africa’s poor growth performance. Poor planning fuels a vicious poverty
cycle.
Electricity is a critical vehicle for economic growth. High transportation costs and
high energy costs deflate economic growth. Infrastructure investment enhances private
sector development by lowering the cost of production and opening new markets. When
appropriate cost-benefit analyses show positive social and economic impact,
infrastructure projects can promote GDP. There is considerable debate around the cost-benefit
of rural electrification. However, there is general consensus that electrification
provides services that are fundamental to modernization and development goal
3 http://spice.stanford.edu/docs/social_conflict_and_political_violence_in_africa/
4 http://www.africapartnershipforum.org/48908487.pdf
5 Ibid.

achievement. For example, Rwanda is now considered to be a beacon of hope for East
Africa. Rwanda has many progressive laws, such as the ban of all plastic bags to
eliminate street waste.6 Yet, in rural Rwanda only 1.9% (2009) of the population have
access to electricity.7 The lack of electricity access also starkly contrasts with the fact that
45.2% (2010) of Rwandans have mobile devices.8 Clearly, there is a consumer demand to
be connected to not only the electric grid, but also be connected to networks outside their
own communities.
Mobile devices are no longer used to just make telephone calls or send simple text
messages. In the past year, there has been a 14% increase in global web traffic via mobile
devices, and 16% in Africa and 23% in Asia.9 Today, one in every five people own a
smartphone, a data enabled mobile device.10 Demand for information stored on the World
Wide Web is clearly increasing, yet access to this information
remains very disjointed
because the Internet is not
owned by a single entity, it
is a network of computers.
As more and more people
and devices demand
information from the
6 http://www.theatlanticpost.com/culture/environmentally-cautious-rwanda-maintains-plastic-bag-ban-
3790.html
7 http://www.rwi-essen.de/media/content/pages/publikationen/ruhr-economic-papers/REP_10_231.pdf
8 http://www.statistics.gov.rw/publications/article/rwanda’s-mobile-phone-penetration-rised-over-past-five-years
4
9 Figure 1, Statista StatCounter, Access October 2013
10 http://www.businessinsider.com/smartphone-and-tablet-penetration-2013-10
Figure 1

5
Internet, this network will continue to grow. While growth is an important part to the
Internet’s strength, there is a global debate between regulating expansion and leaving
growth open to competitors. Many argue that disjointed regulation compromises equal
access and efficient infrastructure, and others argue that the Internet is still a nascent
technology that needs venture capitalists willing to innovate and take risks.
Regardless of the methodology, bridging the digital divide is a critical objective
for future development goals.11 The maturation of electricity access had similar growing
pains. It is important for policy makers and technology implementers to remember
lessons learned from electricity access expansion because electricity and the Internet have
undeniably similar affects on society. For example, communication transformed with the
introduction of electricity as telecommunications technology was implemented around
the world. Similarly, the Internet has again transformed communication. In 1993, only
1% of information was communicated via the Internet, in 2000 it jumped to 51%, and in
2007 over 97% of the world did. In historical terms, the Internet’s takeover was nearly
instant.12 The Internet is essential to globalization, making the world a “smaller” more
“connected” place where ideas can be exchanged instantaneously to increase
productivity, efficiency, and creativity.
This paper theorizes that the economic framing of electricity (standardized, cheap,
and an in abundance) must be also be applied to the Internet in order to maintain
economic stability, and general societal peace. These resources, or economic fuels, are
critical to economic stability. As society has progressed from man, to steam, to electric,
to information power economies, there have been clear economic winners and losers. The
11 http://pewinternet.org/default.aspx
12 http://www.sciencemag.org/content/332/6025/60

divide between these two groups is not sustainable. Today, many societies ensure electric
power is always available in abundance; society needs to adapt a similar economic frame
of mind for the Internet. The Internet, or information power, accounts for a larger
proportion of global economic activity than agriculture.13 The Internet is already a larger
and larger global economic influence. Optimizing this economic sector is critical to
economic stability, and therefore also critical to all other components of peace.
6
Methodology
There are a variety of methodologies that could demonstrate the importance of
Internet access to peaceful societies. Security, society, politics, and economics are critical
components to peace. As previously discussed, the definition of peace is multifaceted and
each component is interdependent, and for the purposes of this paper, economic stability
is most fundamental to maintaining stability in all other components. This definition of
peace is holds throughout the paper.
Various forms of power shape economies. The primary form of power in a given
time arguably shapes that era. During eras of primary muscle power to steam power to
electric power to information power, respective economies drastically change and
therefore all other parts of society do too. This paper does not focus on the transitions
from each dominant power source to the next because each remains an important variable
to an evolving economy. The effect of the predominant power source is more critical to
13 McKinsey Global Institute "Internet Matters: The net’s sweeping impact on growth, jobs, and
prosperity." http://www.mckinsey.com/insights/high_tech_telecoms_internet/internet_matters. May 2011.
McKinsey and Company. Accessed October 2013.

7
proving the necessity for universal access to these power sources, be it electricity of the
Internet.
Electric power is the most parallel to information power. These two sources are
economic fuels on a micro and macro scale. An overview of the evolution of electricity
access expansion will demonstrate its economic effects on consumers. An overview of
standardization processes and large public investment in electricity infrastructure will be
used to reveal these policies’ positive impact on economic growth and stability. Data
sourced from the Organization of Economic Cooperation and Development (OECD) and
the World Bank Group measure electricity access and electricity usage, as well as its
effects on factors such as healthcare and education.
An overview of the evolution of Internet access expansion will demonstrate its
effect on consumers and businesses, as well as postulate how it will continue to do so in
the future. A report produced in 2011 by the McKinsey Global Institute sets a metrics
standard for measuring the economic impact of the Internet. The metrics and results will
be adopted in this paper. Additionally, empirical research from the OECD, the World
Bank, and other sources will evaluate why the increasing consumer demand for Internet
access is crucial to economic stability.
Electrification and Internet access expansion are both highly technical. The author
recognizes that the technicalities of processes such as the evolution of electrical
generation centralization (p.25) Internet network hierarchy (p.29) are not exhaustive. The
goal is to provide enough insight for an unfamiliar reader to grasp both system’s
similarities and differences. Some critical definitions are set below, and throughout the
rest of the paper.

8
Because the methods of Internet access are not as standardized as electricity,
Internet access will be defined as access to the World Wide Web. There are several
modes of access. Cellular bandwidth and broadband via wired or wireless systems are the
most popular access methods to the World Wide Web. Data from the Federal
Communication Commission (FCC) (Figure 2) are exclusive to the United States.
However, the socioeconomic spectrum, rural versus urban spectrum, and racial
demographic spectrum applicable to this data set makes it applicable for a high level
overview of general trends in the developed world.
Figure 2
How all of these networks are monitored, secured, and maintained is the most
disjointed part of the process. There are several gateway protocols, a system of rules for
exchanging routing information across autonomous systems that are primarily upheld in
faith. As the number of autonomous systems grows, protocols become increasingly
fragile. For the purpose of this paper, protocols will refer to the generalized systems of
rules regulating the Internet. Governments and some international bodies have varied
amounts of regulatory control over their respective domains. For example, Germany has
respective control over hosts within the .de domain, or China has respective control over

9
hosts within the .cn domain. Additionally, the Internet Society (p. 31) is considered the
most influential Internet regulator as determined by the United Nations.
Access to all of the Internet’s various networks is dependent on the strength of the
connection between the networks (p. 32). Optical carriers are the most efficient lines to
transfer data. However, these are expensive and require dramatic infrastructure projects.
For example, Google is developing an arm of its company to be an Internet Service
Provider (ISP) called Google Fiber. The objective is to provide private households access
to optical carriers rather than typical modems or phone lines. Modems, phone lines,
digital subscriptions, and cellular bandwidth are the most popular consumer methods to
access the Internet. The utility of these methods can vary greatly. Wired digital
subscription is considered a very reliant tool to access data, however, cellular bandwidth
is limited in its function. The variability between these access methods can be measured
in data rates, service cost, reliability, and device applicability. For the purpose of this
paper, variability in the above four areas will drive the analysis on Internet access.
The variability from open access to restricted access is also commonly referred to
as the digital divide, or digital gap. The digital divide is difficult to measure because of
the above four variables. Is Internet access on a smartphone with a limited data plan
comparable to Internet access on a desktop computer connected to corporate Local
Access Network (LAN)? The Organization of Economic Cooperation and Development
published a seminal report on understanding the digital divide. OECD defines digital
divide as the, “gap between individuals, households, businesses and geographic areas at
different socio-economic levels with regard both to their opportunities to access
information and communication technologies (ICTs) and to their use of the Internet for a

wide variety of activities.”14 This paper will adopt said definition. The economic impact
of the digital divide is not thoroughly studied; however, the impact of Internet policies
and general impact of the Internet on economies are better documented. The digital
divide’s economic impact is critical to this paper’s thesis that Internet access must be
handled similarly to global electrification goals to stimulate economic growth and
stability. For the purpose of this paper, the economic effect of the digital divide will be
analyzed primarily through the number of access lines per 100 inhabitants (Appendix 1)
and Internet hosts per 1000 inhabitants (Appendix 2), in addition to these comparisons to
GDP growth and economic sector makeup (Figure 5).
10
This paper is driven by the high level comparison between electrification and
Internet access expansion. The evolution of these two economic fuels will provide
context to about a dozen small case studies that intend to illustrate how the necessity for
electricity access and the necessity for Internet access cannot be overlooked if societies
wish to remain stable and peaceful.
Literature Review
The parallel evolution of electricity and the Internet is not widely document.
There are a few introductory statements in economic impact reports on the Internet that
draw this parallel, though not much further detail. Most commonly, Internet access
expansion is parallel with the freedom of expression and the elimination of censorship.
While this parallel is relevant in a wider context of paths to peace, this paper concentrates
on the economic impact. Communication is critical to globalization and economic
14 http://www.oecd.org/sti/1888451.pdf

stability, as previously discussed; however the transformative effects of electrification on
labor and consumerism provide a strong precedent for future Internet policy.
11
In 1919, John Maynard Keynes attended the Versailles Conference as a delegate
of the British Treasury. The conference convened to negotiate the post WWI treaty.
Keynes pushed an economic agenda, though the conference focused primarily on security
and borders. He strongly argued against reparations. Many other delegates were of the
view that holding Germany economically hostage would incentivize peace. Keynes
retorted that overall debt forgiveness would not only help Germany prosper into a
peaceful state, but would also benefit Britain. In his best-selling text, Economic
Consequences of Peace, he reflects on the importance of economic stability on internal
and regional peace. He ended the book with an ominous warning, “But who can say how
much is endurable, or in what direction men will seek at last to escape from their
misfortunes?" The economic policies at the time led to extreme inflation and price
control, which disenfranchised German consumers and the nation’s economy; those
policies are largely considered the cause of Hitler’s rise. Keynes clearly demonstrated
how economic stability is fundamental to all other components of peace.
Keynes’ book enforced the notion that creating mutually reinforcing political,
economic, security, and social systems was a best practice for establishing peace that
would unlikely revert back to violence. By the mid 20th century, electricity was an
integral mutually reinforcing system throughout the world. In Thomas Edison’s writings
he documented the paradigm shifts in manufacturing, and the byproducts’ positive effect
on society. Many futurists also penned stories of utopian worlds. Additionally, the
historical recount of Henry Ford, the assembly line, and other advances attributed to

electricity are well told by energy historian David Nye in his seminal book, Consuming
Power. He outlines six major energy transitions from muscle power to computing power.
He suggests that the “idea of early-American family self sufficiency is a ‘cherished
misconception’” and emphasizes how critical the Industrial Revolution and electricity
was to truly marking the “end of the era of muscle.” Nye successfully equates high
energy use and American expectations of abundant energy to a classically "liberal,
laissez-faire ideology" of self-reliant individualism, a "technological Lockeanism" that
empowers Americans with "new fuels and new energy sources."15
To further this point, in 1994, the US Air Force limitedly distributed a report that
12
clearly outlined strategic attacks against national electric systems in Germany, Japan,
Vietnam, Desert storm and other conflict zones.16 Though there were several noted
failures on these planned attacks, the strategy aimed to slow economic growth. In
Vietnam, factories without power were forced to craft replacement tools by hand. In
Germany, electric grid attacks were not prioritized, against the wish of Secretary
Morgenthau, because highly interconnected systems are able to redirect power if the
transmission line network is reasonably in tact. This report exemplifies the economic
impact of electrification on peace, conflict, and society.
In more recent years, stabilization of peace through conflict has been waged
through data attacks. From the Olympic Games17 to Waking Shark II18 there is a new,
vulnerable network of economic fuel. The transition in drills protecting electric grids to
15 Nye, D. E. (1998). Consuming power a social history of American energies. Cambridge, Mass.: MIT
Press.
16 www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA425504
17 In 2010, the US began launching targeted cyber attacks on Iranian centrifuges, a military strategy dubbed
the Olympic Games - Schmidt, E., & Cohen, J. (2013). The New Digital Age: Reshaping the future of
people, nations and business. New York City: Knopf Publishing Group.
18 A series of planned cyber attack drills against British banking systems. (Reuters)

Internet networks demonstrates a paradigm shift in societies primary economic fuel. The
Big Switch is well documented by Nicholas Carr, in his 2008 book.19 Carr argues that
technology can shape a society. Society is shaped by economics, by the efficiency of
consuming and producing goods because ultimately it is the competitive marketplace that
guarantees the most efficiency systems of consumption and production will prevail.
Electricity prevailed to the point where its consumption is no longer a choice. Soon this
choice will no longer exist for the Internet either. To be anti-technology is an arguably
worthless cause and will be futile in the end. Electricity extended man’s physical powers,
and Internet extends our intellectual powers. Facets of our society from public education,
mass culture, class structure to a shift to service economy we assume as fundamental are
increasingly reliant on Internet enabled technology.20
13
There is one particularly intriguing excerpt where Carr quotes Lewis Mumford’s
1970, The Pentagon of Power: “ Western society,” he wrote, “has accepted as
unquestionable a technological imperative that is quite as arbitrary as the most primitive
taboo: not merely the duty to foster invention and constantly to create technological
novelties, but equally the duty to surrender to these novelties unconditionally, just
because they are offered, without respect to their human consequences.” In response,
Carr wrote:
“His error lay in suggesting that we might do otherwise. The technological
imperative that has shaped the Western is not arbitrary, nor is our surrender it its
discretionary. The fostering of invention and the embrace of the new technologies
that results are not “Duties” that we have somehow chosen to accept. They’re the
19 Carr, N. G. (2008). The big switch: rewiring the world, from Edison to Google. New York: W.W. Norton
& Co.
20 Ibid, p. 20-26

consequences of economics forces that lie largely beyond our control. By looing at
technology in isolation, Mumford failed to see that the path of technological progress
and its human consequences are determined not simply by advances in science and
engineering, but more decisively, by the influence of technology on the costs of
producing and consuming foods and services.”
If the Internet will not be a choice as theorized by Carr, then it is arguably even more
essential for economic stability that it be accessible. Economic inequality exasperates
societal inequality; a sense of disenfranchisement threatens peace.
Society is defined by a series of economic trade offs, therefore economic stability
14
is essential to a stable society. He concludes with how societal stability and economics
stability are correlated through evidence that political stability leads to growth, and
growth sustains political stability. Electricity was invented in American and led to its
superpower status in the 20th century. Internet was also invented in American will
continue to be essential to growth and American stability in the 21st century.
The second half of Carr’s book, and many of his subsequent writings, focus on
how cheap, utility supplied computing will ultimately change society as profoundly as
cheap electricity did. The new economics of doing business online has become a boon to
consumers. The World Wide Web’s most frequented websites were once expensive, and
are now all virtually free. Richard Barbrook, of the University of Westminster in London,
expressed this view well in his 1998 essay, “The Hi Tech Gift Economy. He wrote of
Internet users: “Unrestricted by physical distance, they collaborate with each other
without the direct mediation of money or politics. Unconcerned about copyright, they
give and receive information without through of payment. In the absence of states or

15
markets to mediate social bonds, network communities are instead formed through the
mutual obligations created by gifts of time and ideas.”21
Even with all those freedoms, economists continue to argue the causes of growing
inequality in developed economies. Distinguished Columbia economist Jagdish Bhagwati
argues that computerization is the main cause behind the two-decades-long stagnation of
middle-class wages. He argues that although there are more jobs, they require lower skill
sets and place “relentless” pressure on wages.
A widely cited and influential report on this economic impact was produced by
the McKinsey Global Institute in 2011 entitled, Internet Matters: The net’s sweeping
impact on growth, jobs, and prosperity which embodies a more optimistic outlook on the
impact of the Internet. It concludes that, “Understanding just how much the Internet
contributes to national economies should spur government and business leaders to seek
ways to optimize their participation in the global Internet ecosystem. Encouraging usage
is an unavoidable first step in leveraging public spending but leaders but also focus on
providing human capital, financial capital, infrastructure, and the appropriate business
environment.” This conjecture is based on many empirical studies complied by
McKinsey that show clear results of positive economic impact (Figure 5).
Vinton Cerf, one of the founders of the modern Internet and pioneer of the
Internet Freedom Declaration, is a strong believer in the Internet of Things and prefers a
more market-based approach than the McKinsey report. He is a prolific futurist who
writes about a world where any flat surface will become a reasonable surface for
Bluetooth enabled projectors tucked away in buttonholes. He is also aware of the
Internet’s finite capacity for quality, “Are we solving problems, learning how to
21 Ibid., 141

multitask? Is that a good thing? I don’t know. It’s a little bit like television. When it
arrived there were many expectations that it would improve education and everything
else. But what we discovered is there’s a finite amount of quality in the universe, and
when there are more channels it has to be cut up into smaller and smaller amounts until
finally, every channel delivers close to zero quality, and that’s where we are today, with a
few exceptions,” he recently revealed in an interview The Smithsonian.22
Cerf adamantly believes that regulation will stifle the potential of the Internet. He
argues that it was founded with a fundamental design of autonomous networks with
universal freedom. While his dissent is largely focused on the 42 nations (out of 72
studied in the Open Net Initiative) that filter and censor content that “threaten online free
expression,” he is also vocally dissents the International Telecommunications Union’s
increasing involvement in Internet regulation. The United Nations ITU’s treaty was based
on telecommunications. He does not believe this lays a workable context for Internet
policy. Rather, he prefers to endorse the multi-stake holder approach of the Internet
Engineering Task Force organized by the Internet Society non profit (p. 31) Cerf writes,
“While some governments argue that the internet needs new global rules to speed its
rollout in the developing world, we believe the present market-driven approach is best
positioned to keep up with the net's exponential growth. Broadband services are being
rolled out. Service interruptions remain rare. Within a few years the net is predicted to be
serving four billion users -- more than half of humanity!”23
16
Overall, the breadth of literature on the economic impact of electricity far
outweighs that of literature on the economic impact of the Internet. The parallels between
22 http://www.smithsonianmag.com/specialsections/40th-anniversary/Vinton-Cerf-on-Where-the-Internet-
Will-Take-Us.html
23 http://www.cnn.com/2012/11/29/business/opinion-cerf-google-internet-freedom/

the two sets of analysis provide a platform for interesting insight, qualified policy
recommendations, and a strong context within which to research this paper’s theory and
objective.
17
Evolution of Economic Power
In economic times defined by resource scarcity, it is critical that the Internet not
be one of these scarce resources as it provides a gateway to collect, process, and
disseminate crucial information for economic sustainability for types of end users. Access
to electricity’s byproducts, such as heat, is considered a human right in many parts of the
world. Access to Internet’s byproducts will also be considered a human right, for
example access to social media networks will be comparable to the universal freedom of
expression. These byproducts are critical components to peace.
Power is essential to economic productivity. If there is low electricity capacity, it
is not expected that lights dim. So why if there is lower broadband capacity it is accepted
to data processing time increases dramatically? How economic forces and policies have
adjusted to the power of these power utilities is an increasingly important aspect to
understanding why bridging the digital divide, like bridging the electro divide, will be
continue to be good economics.
Muscle Power
Finite resources incite conflict. When a necessary resource is framed as scarce,
nations will ensure resource security to maintain or increase productivity status quo.

18
Security will be defined as predictable macro-level output flow. Resource can be
interpreted as, including but limited to: natural resource, trade route, or labor. A key
characteristic of all resources is vital contribution to national economies; without a
particular resource, a market failure occurs.
Muscle was man’s first source of economic power. From brute strength to subtle
ingenuity, man transformed society by adding value to economic markets. The power of
man eventually became so sought after that the power of one man was not enough for one
man alone. The desire to be able to own more than one could produce led to slave trade.
A quest for resource security can cause instability when it requires breaching
sovereignty of another party’s rights to resource access. In the short run, resource
acquisition, regardless of the means, can promote internal stability; however, in the long
run, exploitative means of acquisition can incite internal and external conflicts.
There are several examples in history where resources are exploited, denied,
stolen, or purchased at a high cost in order to maintain security, or economic stability.
Labor is a valuable resource for a productive society. Often times the value of labor is not
reflected in its direct cost to producers. Workers’ value-add and pay are traditionally, and
intentionally, incongruent. A profit maximizing company will withhold a percentage of
every worker’s economic output in order to avoid full compensation. 24 This holds
particularly true in industries with few potential employers. Oligopolistic markets are
able to consistently underpay workers’ of their full value because labor markets becomes
specialized, so their skills are not directly transferable to other markets where they may
have potential for higher earnings.
24 Nicholson, W. & Snyder, C. (2012). Microeconomic theory: basic principles and extensions (11th ed.).
Mason, Ohio: South-Western/Cengage Learning.

An extreme form of
resource exploitation is
slavery. Labor output is
maximized in a slave
economy because the
economic output generated
by slave labor far
outweighs its costs. In the
Figure 3
1700s, the US only imported 6% of all slaves traded in the Americas, yet by 1825 the US
had nearly a quarter of all blacks in the region. Slaves on cotton plantations worked on
average 3,000 hours per week – about 2.25 times the labor output of a modern factory
worker.25 The US South had tremendous global economic power in the mid 19th century.
In the short term, slavery was able to support a burgeoning economy.
A recent study published by the Paris School of Economics reveals the economic
19
power of the US slave system: slave wealth outweighed transportation and industrial
wealth, combined, from 1700 to 1860.26 As the US North moved towards an
industrialized economy, it was no longer favorable to have such a large portion of US
economic wealth be dependent on slavery, a workforce specialized in agriculture.
However, US South’s population remained about 43% enslaved blacks.27
The exploitation of this labor resource inevitably led to the internal conflict
between the US North and the US South in the longer term. The American Revolution,
25 http://www.gilderlehrman.org/history-by-era/slavery-and-anti-slavery/resources/facts-about-slave-trade-and-
slavery
26 http://www.parisschoolofeconomics.com/zucman-gabriel/capitalisback/PikettyZucman2013WP.pdf
27 http://www.bowdoin.edu/~prael/lesson/tables.htm

the US’s Civil War, was fueled by an ideological debate on economic resources - with
slavery the US South was determined to maintain its economics power; without slavery
the US North was determined to capitalize on industrialism’s growing portion of overall
economic wealth. Slavery was an economic resource that was necessary for one side’s
economic survival and detrimental to the others. The US Civil War results in 640,000
causalities. In 1860 the national debt was $65 million, in 1865 the national debt stood at
$7.2 billion; the annual budget soared from $63 million to $300 million. Conflict is
expensive. To put it in perspective, when George Washington took the president the
national debt was $77 million.28 After two wars, expanding across the continent, the
national debt had decreased; the US was prospering. The cost of prevention, the cost of
maintaining cheap and accessible economic fuels, yields a net positive cost-benefit
analysis.
20
This proves the volatility of the quest for resource security. This is no
endorsement for slavery and does not diminish the violence of slavery. The US South’s
economic stability can be attributed to their uninhibited access to their self-proclaimed
economic manifest of agricultural superpower fueled by free labor. When the US South’s
primary economic resource, free labor, went from an abundant good to a scare good, the
shift in the market supply of this critical resource incited economic, political, and social
instability, which resulted in many lives lost. Today, slavery still exists although the
necessary economic fuel can be attained with far fewer and grave negative externalities.
The cheaper and more accessible subsequent economic fuels, such as electricity or
nuclear energy, become the less reason there will be for conflict ridden power sources
around the world.
28 http://www.fee.org/the_freeman/detail/the-economic-costs-of-the-civil-war#axzz2mpB8iX00

21
Electrical Power
In 1893, Chicago hosted the Columbian Exposition. The fairgrounds were
constructed on a 633-acre site on Lake Michigan to form a city within a city. The
exposition celebrated advances in industry, transportation, and the arts, but most of all it
celebrated the arrival of electricity as the nation’s new animating force. The organizers of
the event wrote that it was their intention “to make the World’s Fair site one grand
exemplification of the progress that has been made in electricity.” During the fair, the
exposition consumed three times as much electricity as the rest of the City of Chicago.29
Henry Adams described the light show in his autobiography, The Education of
Henry Adams, with humility and awe. He believed that the machines “would result in
infinite costless energy within a generation,” and a “new phase in society.” He realized
that this new phase entailed many unknowns: “Chicago asked in 1893 for the fist time the
question whether the American people knew where they were driving.” The electrical
grid brought profound change and quickly reshaped business and society. “In short, the
central supply of cheap electricity altered the economics of everyday life. What had been
scarce, the energy needed to power industrial machines, run household appliances, light
lights, became abundant,” writes Nicholas Carr. Electricity was the force behind the
Industrial Revolution. Light and power allowed factory workers to scale their operations
and boost outputs. Large corporations emerged as small businesses were able to
continuously communicate across distant mergers and acquisitions. Electricity brought
forth new communication and computation tools, such as the telephone network and the
29 Carr, p. 86

22
punch card tabulator. This created complex internal bureaucracies that were able to
handle a wider breadth and further depth of tasks.
Productivity did not just increase because managers were able to quantify output
faster and accurately with electric machines. Electric byproducts such as fans for clean
airflow, stronger illumination to ease work conditions, and less gear and pulley systems
to reduce accidents increased the general health and productivity of factory workers. The
introduction of light bulbs and electric motors did have its downsides. For example,
workers were no longer expected to hone specific crafts or skills. The ability to operate a
machine displaced artisan talent. Humans became machine-like; Frederick W. Taylor, an
influential engineer of the time, went so far to time specific movements of workers to
maximize mass production.
Before electrification, an innovation like an assembly line seemed unattainable.
With the debut of Henry Ford’s automated line in 1913 at his car plant, it was clear that it
was built on the “assumption that electrical power should be available everywhere,” notes
historian David Nye in his book Consuming Power30. Ford himself commented how,
“without high-speed tools and the finer steels which they brought about, there could be
nothing of what we call modern industry.”31 Henry Ford’s influence on what we call
modern industry and modern society did not stop at the end of the factory line. In order
to incentivize workers to remain in their tedious jobs he doubled wages across the board.
The business world was upset, but they knew they had to respond when 15,000 men lined
up for 3,000 vacant positions outside of Ford’s plant. This industry wide wage increase
30 Nye, p.141
31 Ford, Henry; Crowther, Samuel (1930). Edison as I Know Him. New York: Cosmopolitan Book
Company. p. 15 (on line edition).

played an important role in the development of the middle class, which turned out to be a
vast and relatively prosperous sector of society.
23
As electrification continued to spur specification, upper level management jobs
were created and the “knowledge worker” and their white collars were born.32 That led to
what Harvard economist Claudia Goldin has termed, “the greatest transformation of
American education.”33 Within a generation, attending secondary school became
commonplace. This enabled a virtuous cycle for electricity utilities. The new middle and
upper class used their wages to purchase household electric appliance such as toasters
and refrigerators. The increased demand pushed down production costs. This economic
cycle created a huge market for an array of electrically powered products. Now utilities
were providing energy sources to factories that also created products that required
electricity access. This led to even greater economies of scale for utilities that allowed
them to cut electric rates further and spur even more demand for their current and the
appliances that ran on it.
The economic effects, and extended social effects, of electricity brought visions
of utopian society. People were told that electrification would cleanse the Earth of,
“disease and strife, turning it into a pristine new Eden.”34 Futurists in the early 20th
century wrote about “electrified water” that would be “the most powerful of
disinfectants,” and that, “by the all potent power of electricity, man is now able to convert
an entire continent into a tropical garden at his pleasure.” (Those futurists were not far
off. Ionized water is frequently used to sterilize hospitals and Dubai has a fully climatized
32 Carr, p. 89
33 Claudia Goldin, “Egalitarianism and the Returns to Education During the Great Transformation of
American Education,” Journal of Political Economy 107 (December 1999), S65-S94
34 Electrifying America: social meanings of a new technology, 1880-1940. Cambridge, Mass.: MIT Press.
p. 149-50

ski slope in the middle of the desert.) When society has the ability to choose health and to
choose paradise because a larger proportion of the population is empowered through
electricity access, higher wages, consistent education, and safer shelter each day becomes
more predictable. Predictability is an important component of economic stability, and
peace; there is no immediate reason to be up in arms when tomorrow is expected to be at
least as successful as yesterday.
24
The impacts of electrification would not have been possible without the
standardization of the electric system. Critical to electric utilities’ success were universal
standards that allowed the electric grid to truly act as one machine. If factory
components, wires, or other production elements greatly varied, economies of scale
would have been reduced. To avoid such scenarios, utilities and manufacturers
established national and international associations to negotiate standards, share patents,
learn best practices, and engage with government agencies. From the International
Electrotechnical Commission to the National Rural Electric Cooperative Association, the
network of standardizing organizations is expansive, yet effective. Beyond outlet
adapters, there is virtually no additional effort necessary to access electricity sources
anywhere in the world. Products designed in the United States, produced in China, and
sold in Australia can also be shipped to Germany or Ghana with equally complex supply
chains. The global economy exists because of the economic impacts of electrification on
the enhanced production process, global communications and the standardizations around
it.
Another importance factor in creating the “one machine,” was evolving away
from Edison’s original local electricity generator network, to large generation plants that

could transport current much further distances. “While Edison was vainly trying to hold
back progress, Insull was moving to capitalize on it. He was the first to realize, that with
new technologies, electricity supply could be consolidated in immense central stations
that would be able to meet the demands of even the largest industrial customers.”35 With
the advent of alternating currents, central power stations were critical to releasing higher
voltage with lower loss along transmission lines.
Figure 4
25
Today, electricity is a critical resource for all modern economies. For most
developed nations, electricity is framed as being in abundance. There are no caps on
electricity access that force consumers to think twice about connecting several devices to
the electrical grid.36 Regulating electricity consumption is widely considered a step back
from the progress resulting from electrification. In 2009, California passed a bill that will
require all television sets to be twice as efficient by 2013. Governor Schwarzenegger
hailed the legislation as a step towards combating climate change and reducing consumer
35 Carr, p. 39
36 Electronic rationing is considered a last resort policy in times of energy crisis. For example, in 2001,
Brazil was forced to implement energy rationing to avoid exasperating drought, which was considered
more disruptive than a temporary rationing.

costs, not as an attempt to conserve resources.37 Aside from decades of Malthusian doom-mongering
on the state of energy resources, all credible reports indicate an abundance of
energy resources such as crude oil, natural gas, and alternative energy investments that
can supply an estimated 40 to 100 years of current consumption levels.38 Electricity is in
abundance. Markets and consumers are confident that electricity will always be available
and supply all demands, in a standardized manner. This future confidence is important for
economic stability, and ultimately peace.
26
Electricity supply is dictated by consumer demand. It is expensive to store
because of technology shortages, yet expected to always be available. The peak capacity
hours of electricity use are expected to be as efficiently satiated as low capacity hours.
According to BP Statistical Review data, energy capacity and energy generation (or
capacity considering instantaneous consumption due to storage shortages) correlate at a
96% rate globally.39 Demand for electricity is exponentially increasing. It is projected
that world energy consumption will grow by 56% from 2010 to 2040.40 Because energy
is in abundance, the 96% correlation rate will not suffer – it is only expected to grow with
technology improvements.
Not all regions have energy abundance. There are 1.3 billion people without
access to electricity and 2.3 billion people that rely on traditional biomass for cooking.41
The implications on education42 and healthcare are tangible. Burning biomass for cooking
37 http://hometheater.about.com/b/2009/11/18/california-energy-commissions-approves-tv-efficiency-regulations.
htm
38 http://www.forbes.com/sites/energysource/2013/03/07/we-live-in-an-age-of-energy-abundance/
39 http://www.nationmaster.com/graph/ene_ele_gen_ter_hou_sha_of_tot-generation-terawatt-hours-share-total
40 http://www.eia.gov/forecasts/ieo/index.cfm
41 http://www.worldenergyoutlook.org/resources/energydevelopment/#d.en.8630
42 “Energy access has real implications for educational attainment across the continent. Only half of
primary school students in Abu Hasheem, a small south-eastern state in Sudan, received passing grades on

typically results in an open flame in a small, unventilated space, often in rural and urban
slums. This practice kills 1.6 million people a year, requires on average 10 miles of
walking and 35% of incomes spent on collecting wood, and produces the equivalent of 40
cigarettes a day.43 In 2013, The Paradigm Project, a US State Department funded energy
efficient stove distributor, has increased local incomes by more than $2 million by
supplying 195,000 stoves. The cost per life impact is low and its impact high. The 82
million hours saved by the Paradigm Project are now redistributed to education, and other
positive economic activity.44 Though economic impact of providing sustainable energy
sources to communities around the globe is constantly increasing the launch of programs
such as the UN’s Sustainable Energy for All and the Obama Administration’s Power
Africa initiatives demonstrate the willingness to achieve universal electrification.
27
A major component of this political willingness to invest in electricity
infrastructure is its low prices. Government action has been able to successfully
manipulate economic forces to drive down the price of this essential utility. For example,
initially in the early 1900s, electric rates in the northeast were significantly lower than the
rates reported in southern cities. These differences are, “due to differences in customer
densities, learning by doing, and operating costs of generation plants45.” The northeast
began electrifying earlier so that costs of operation had fallen and many of the networks,
such as the Edison system in New York, relied on coal fired steam generation. “Many of
the utilities in the South did not adopt coal-fired steam until after the passage of the
their exams in 2007. That number increased to 100 percent after the Sudan Multi Donor Fund-National
sponsored a project to provide solar power to the community. Success rates like this can be achieved across
sub-Saharan Africa if more schools were provided with solar lights or other means of access to electricity.”
http://www.one.org/us/2013/07/03/a-classrooms-worst-nightmare-energy-poverty/
43 http://theparadigmproject.net/more-about-the-problem
44 Ibid.
45http://www.stanford.edu/group/SITE/archive/SITE_2012/2012_segment_3/2012_Segment_3_papers/kitc
hens.pdf

28
Federal Water Power Act in 1920.” The act regulated interstate waterways, which
incentivized private utilities to make the shift to coal. “These coal fired plants led to
competitive electric rates that were among the lowest in the nation.”46
The evolution of electricity access has fundamentally changed over the past
century through consumer demand, economic policy, and corporate decisions. The
coordination of these decisions through standardization, ensuring abundance, and
encouraging technological advancement has provided millions of people around the
world access to power. Electricity access provides opportunity to join a global network of
communication and productivity. Today, electricity is no longer this only predominant
economic fuel – the role of the Internet is increasingly exponentially.
Information Power
According to the researchers at the
2011 G8 conference, the electricity
revolution required 50 years to
mature; and the Internet revolution
has taken only 15 years to reach the
same level of impact.47 In 1989, no
company had a public facing web-presence.
Figure 5
In less than two decades, nearly two-thirds of all businesses worldwide have
Internet presence. If the Internet were a sector, it would produce more economic activity
46Ibid.
47 McKinsey Global Institute "Internet Matters: The net’s sweeping impact on growth, jobs, and
prosperity." http://www.mckinsey.com/insights/high_tech_telecoms_internet/internet_matters. May 2011.
McKinsey and Company. Accessed October 2013.

29
than agriculture or utilities. Globally, Internet activity contributes to 2.9% of global per
capita GDP, a total $1.7 billion. The majority of that activity comes from private
consumption, followed by public expenditures.48 49 The Internet has contributed net
positive contribution to the economy because for every one job lost to new efficiencies,
2.3 jobs are created.50 As electricity was the crux of modern industry, Internet is an
emerging crux of the modern economy.
To better compare the evolution of electricity access to Internet access, it is
important to expound on the notion that the Internet is not owned by a single entity,
rather it is a network of computers. The very name Internet comes from the notion of
interconnected networks. Every computer that connects to an Internet Service Provider
(ISP) is part of the network. A computer at a residence would typically connect over a
conventional phone, cable modem, or digital subscription. A computer at a business
would typically connect to an ISP over a local area network (LAN). Large ISPs will
connect these networks over a Point of Presence (POP) for respective regions. So that
Computer A in POP 1 can connect with Computer B in POP 2, there is a high level
network of network access points (NAPs) rather than an overall controlling network.
Trillions of bytes of data flow between NAPs. A byte is a unit of data typically eight
binary digits long that represents a word, number, symbol, or piece of an image. For
example, computer storage is measured in byte multiples such as 820 mega bytes. To
avoid data redundancies and clogging the connections of “innocent bystanders”, routers
determine where to send data from one computer to another. The lines over which routers
and networks operate are called backbones, or fiber optic trunk lines. Fiber optics lines,
48 Ibid.
49 Ibid.
50 Ibid.

or optical carriers (OC), can carry much more data at faster speeds than, for example,
modems. NAPs can organize information in seconds between different networks because
every device on the Internet has an Internet Protocol (IP) address. There are 4.3 billion
possible IP addresses. However, to recognize IP address 216.27.22.162 versus
214.28.32.174 is not conducive
to the average user so the
Domain Name System (DNS)
was established. DNS
automatically maps text
names to IP addresses within
domains such as .com or .org.
Within each domain, there are
Figure 6
millions of uniform resource locators (URLs) that include a host name such as www. and
the domain name. The possible range of host and domain names is limitless as long as the
system is flexible to accommodate alternative IP address versions.51
30
In 1982, NSFNET was decommissioned. This marked the beginning of Internet
commercialization. Previous to NSFNET, a network maintained by the National Science
Foundation for education and research purposes, the other primary supernetwork was
ARPANET, maintained by the Department of Defense. The DoD mandated the
standardization of protocols, particularly the standardization of the previously mentioned
IPs or TCPs (transmission control protocol). However, the dozens of web vendors at the
time were not aware of the real technology or value ad of TCP/IP. They regarded the
51 http://www.internetsociety.org/internet/how-it-works/technical-aspects

DoD mandate as a nuisance.52 After several rounds of working groups convened by the
US government and other internet advocacy groups, the Internet Engineering Task Force
(IETF) emerged as the body that would maintain these standards and protocols after the
decommissioning of government run networks. IETF ran Interop tradeshows around the
world that demonstrated the utility of interoperability between network providers,
regardless of their competitive status.
31
IETF was founded in 1986 by the nonprofit, Internet Society, in California, and
consisted of 21 US government funded researchers. The mission of IETF is, “to make the
Internet work better by producing high-quality, relevant technical documents that
influence the way people design, use, and manage the Internet.”53 It is one of many
national and international associations guiding the standardization of the Internet. Similar
to the dozens of organizations referenced in electricity standardization, the method of
how data is written and transported is well documented. Where the standardization of
electricity and the Internet has not yet met, is in the standardization of methods of access
and access reliability.
While IP addresses, URL codes, and binary numbers are generally considered
standardized there can be a significant gap when technologies are transferred from
network to network. A new economy has emerged from the 2.5 billion connected devices
with unique IP addresses to the Internet (2009). In 2020, there will be up to 30 billion
devices connected with unique IP addresses, most of which will be physical products,
such as smartwatches or Wi-Fi enabled cameras. It is predicted that the economic value
add for the Internet of Things will be $1.9 trillion dollars in 2020 with potential benefit
52 http://www.internetsociety.org/internet/what-internet/history-internet/brief-history-internet#
Commercialization
53 http://www.ietf.org/about/mission.html

for a wide range of industries, such as: healthcare, retail, and transportation.54
“Computing power will be cheap and covert. We won’t know it is there; it will be in our
jewelry and in our clothing,” says Mr. Sondergaard of Gartner. “We will throw more
computers into our laundry in a week than we’ve used in our lifetimes so far.”55
32
However, the products of the Internet of Things are connected by different radio
technologies. Wi-Fi, Bluetooth, cellular broadband (i.e. 2G), and ZigBee56 use different
data rates57 that prohibit users from universal access to the information their device can
provide. For example, a GSM enabled wristwatch will not be able to automatically
connect to a neighboring Wi-Fi connection. If the smartwatch is able to roam across
networks, that arrangement required a business agreement with all involved network
carriers and common protocols. There have been many efforts by national and
international Internet standardization organizations to make roaming simpler. Untethering
devices from specific networks is critical to being able to gain economies of scale; if the
same household energy smart meter can be deployed to Sacramento, CA and Sochi,
Russia the price of manufacturing will decrease and make high tech products more
accessible to all ranges of the global socio-economic spectrum.
The current issue is that efforts to standardize network arrangements are ad hoc.
In 2012, seven major carriers decided to procure a common network management
54 http://www.gartner.com/newsroom/id/2602817
55 Ibid.
56 “ZigBee is new specification for a suite of high-level communication protocols used to create personal
area networks built from small, low-power digital radios. Applications include wireless light switches,
electrical meters with in-home-displays, traffic management systems, and other consumer and industrial
equipment that requires short-range wireless transfer of data at relatively low rates.” (Wikipedia)
57 The speed at which a bit of data is transferred from machine to machine. In order to be considered
broadband, the ITU Telecommunication Standardization Sector (ITU-T) has established a minimum 256
kbits/s. Data rates are considered asymmetric (supporting higher download that upload rates) and non
reliable because of frequency traffic bottlenecks. (Wikipedia)

platform.58 They did not agree to change their fundamental technology; rather they hired
a third-party vendor to bridge their differences. These differences are crucial for the
Internet of Things to have the same economic impact as electrification did. As the
Internet is creating more high skills jobs, the demand for Internet connected things will
increase, similar to how the purchases of refrigerators once sky-rocketed. Amazon’s
Kindle e-reader is the most popular dedicated e-reader in the world.59 However, Amazon
has a “home” network with AT&T, a large US-based ISP. If a Kindle reader wants to
download a new magazine issue without a free Wi-Fi connection, they will have to pay
high fees to roam onto another ISPs broadband. Interoperability between networks is
increasingly essential, as many estimate that by 2017 mobile phones, tablets and ultra-mobile
33
PCs to represent more than 80 percent of new device purchase.60 Low power
prices were one of the most crucial aspects of electricity adoption, and the efforts to
bridge gaps in energy poverty. For the price of information power to also decline, there
is, arguably, a need for greater incentive for ISPs to standardize network technologies and
network management.
The degree of access between these modes is important to differentiate. Cellular
bandwidth serves limited purpose compared to broadband. Data download, program
testing, and large interactive graphic files have significantly diminished utility on a
cellular bandwidth connection. The primary reason why cellular bandwidth is not a direct
substitute for other connections is because it is localized and has a capacity cap. When
there are many devices trying to connect to the same cellular bandwidth connection, the
58 http://www.vimpelcom.com/Media-center/Press-releases/2012/KPN-NTT-Docomo-Rogers-SingTel-
Telefonica-Telstra-and-VimpelCom-to-cooperate-globally-in-M2M-business/
59 http://www.forbes.com/fdc/welcome_mjx.shtml
60 http://www.gartner.com/newsroom/id/2602817

bandwidth caps out. With current technology, cellular bandwidth is not responsive to
demand. The peak capacity, the maximum amount of bandwidth the respective customer
base could demand at any given moment, is controlled by bandwidth providers at a
profit-maximizing supply ceiling and is not controlled by pure market demand forces.
This supply ceiling limits users’ productivity and overall utility. The assumption of
abundance was critical to the expansion of electricity and many of its positive
byproducts, such as Henry Ford’s assembly line.
34
Unlike electricity where currents are standardized across large regions, the
strength of broadband signal is not predictable. The FCC reports that nearly 97% of the
US has broadband access, however broadband adoption rates hover on average around
60%. Broadband versus dial up modem, for example, allow for higher upload and
download data rates. (Figure 6) A report published by the Department of Commerce after
the 2010 US Census also showed insight into how different socioeconomic groups have
different access strength.61 If electric current strength changed across regions, the
industry’s economic of scale would have been seriously diminished. Economies of scale
are critical to low prices, and universal accessibility. Additionally, as previously
discussed, predictability is at the core of economic stability; it is unsustainable to have
unpredictable access to information that incessantly shapes micro and macro economic
decision-making.
It is not only people with low socioeconomic status who are forced to rely on low
strength wireless devices for Internet connections. For those living in remote, rural areas,
wired Internet access is not an option no matter how much they’re willing to pay. The
FCC reports that 19 million Americans live in communities beyond the reach of cable
61 http://www.fas.org/sgp/crs/misc/RL30719.pdf

companies or other broadband providers. This “access divide” between broadband, dial
up, and mobile cellular bandwidth is particularly important as mobile Internet access is
increasing globally, particularly in regions such coastal Africa and Asia with limited
existing infrastructure. According to a Media Actions Grassroots Network press release,
‟A cell phone or mobile device is not a substitute for a laptop or desktop computer. Many
everyday Internet needs such as applying for a job, conducting research, registering for
classes, or accessing government or social services are difficult or impossible on a mobile
device.”62 Universal Internet access is not enough to bridge the digital gap; the utility of
Internet access must also be equitable to truly experience its economic virtues.
35
It is clear that the intricate, complex network of the Internet has a tremendous
effect and potential effect on the global economy. How Internet access will be expanded
is critical. As with the legislative action that shaped electricity access, such as the1920
Federal Water Power Act, government action on shaping information power is necessary,
and inevitable.
Government policies play a tremendous role in bringing Internet access to or
limiting access for underserved groups, regions, and countries. For example in Pakistan,
which is pursuing an aggressive IT policy aimed at boosting its drive for economic
modernization, the number of Internet users grew from 133,900 (0.1% of the population)
in 2000 to 31 million (17.6% of the population) in 2011.63 Eastern Europe is renowned
for its high performing Internet access. Romania, Latvia, Lithuania, and Bulgaria
consistently rank in the top 20 Internet speed rankings. However, access to these high
speeds lacks, and is nearly half than the European average. Romania’s capital, Bucharest,
62 http://www.scribd.com/doc/48893472/The-Mobile-Internet-Communities-of-Color-and-Low-Income-
Families
63 https://opennet.net/research/profiles/pakistan

often ranks as the top city in Internet speed, yet only 14% of Romanians have consistent
access to the Internet64.
The evolution of
the Internet will continue
to change and progress.
As more users access
information from mobile
devices, more ISPs
establish business
agreements to standardize network management, and government champion access
expansion projects, the way the Internet affects modern economies and modern societies
will become more ubiquitous. Access to the Internet will be synonymous to access to
markets, to trade, to education, to healthcare, and other essential services. As this
fundamental shift in knowledge management happens through the world’s economies it is
critical that policy makes and industry are wary of the digital divide. Economic stability
correlates with economic equality. (Appendix 3) Like the introduction of electric stoves
is saving thousands of people millions of dollars and hours, technologies that give all
global citizens the power to perform at the same potential will chip away at the energy
and information poverty that exists, and holds back progress, today.
36
Conclusion
Technology advances economic power. Economies have progressed from muscle
power to hydropower to steam power to electric power to oil power to nuclear power and
64 Eurostat 2013 via https://developers.google.com/chart/
Figure 7

37
now to information power. This evolution is not realized by all economic in the same
manner. Every economy sets its own value upon every type of economic power source.
There are thousands of variables that can affect that value systems from ecology to
population density. However, one virtue for which all economies strive is to be able to
access whichever economic power source can optimize outputs and increase per capita
economic growth. Technologies are not omniscient because of market forces. The price
of a new technology or the society’s ability to adapt in a cost-beneficial timeline can
restrict opportunities to transition into other forms of economic power.
Omniscience is a curious variable. In Sri Lanka, 76.6 percent of the population
has electricity access65; yet, there are 81 active mobile phones per 100 people.66 Mobile
phones are growing increasingly omniscient in all parts of the world although not ever
user has access to a personal electricity source to charge a mobile phone.67 It is evident
that the functions of the mobile phone are important enough for consumers to usurp the
electricity access issue. Mobile phones are what connect citizens to one another, to
government services, to bank services, and other vital parts of a functioning economy.
Smartphone adoption has increased by 39.5% in the past year.68 Connectivity is key. How
people chose to connect is also transforming. In one day, WhatsApp, a text-messaging
app that transmits data over the Internet via cellular bandwidth, receives over 7 billion
inbound messages. Whatsapp messages are not just sent in OECD countries, it is a top
five most downloaded app in Malaysia, South Africa, and Indonesia.69 Whatsapp is just
65 http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS
66 http://www.trc.gov.lk/information/statistics.html
67 Figure 1
68 http://www.idc.com/getdoc.jsp?containerId=prUS24461213
69 http://www.forbes.com/sites/terokuittinen/2013/01/02/whatsapp-hits-7-billion-inbound-messages-a-day-
75-growth-in-four-months/

one example of many technologies that are displacing traditional communication
methods. Consumers are demanding the virtues of information power all over the world.
Global electrification has been a long process. Thomas Edison developed the first
incandescent light bulb and electrical grid in the late 19th century. The standard electrical
grid went from being able to support a handful to millions of consumers at a moment’s
notice. The price of electricity has steadily decreased and regulation has increased. It
must be noted that there are studies that show that market based approaches to electricity
pricing could further decrease its price in the medium term.70 However, the paths to
which each economy has chosen to electrify, largely through high levels of regulation, its
societies have yielded return on their investment. This ROI calculation is a critical aspect
of economic choices, such as Poland recently forced its largest utility to build a $3.7
billion power plant which is prospected to be unprofitable after electricity prices fell to a
five-year low, all for the fear of power shortage.71 Poland is willing to absorb this sunk
cost because meeting market demand is critical to government and economic stability. An
ROI calculation that could influence Internet access expansion could have dramatic
effects on Internet access rates.
The consumers demand for Internet is growing exponentially. It is necessary that
consumers can expect uninterrupted, cheap Internet service as consumers do with
electricity if economies are going to continue to evolve. For every job lost to Internet’s
efficiencies, 2.3 new jobs are created for the Internet’s growing byproducts and utilities.72
The power of information is critical to making informed decisions on the micro and
70 http://economics.mit.edu/files/1484
71 http://www.bloomberg.com/news/2013-11-14/poland-defies-power-slump-in-3-7-billion-gamble-energy-markets.
38
html
72 McKinsey & Co.

macro level. Households can avoid banking fees if they are connected to the Internet and
can receive push notifications that warn them over overdraws. Nations can make smarter
policy decisions with real time information considering, in the United States for example,
19% of Internet users post material online about political or social issues and a
disproportionate amount of these online activist are youth.73
39
There are notable scaling efforts taking place around the world. From Pakistan’s
Open Net Initiative, the President Obama’s ConnectEd policy platform which plans to,
“connect 99 percent of America’s students to the internet through high-speed broadband
and high-speed wireless within 5 years,” and phase out printed text books by 2016.74 This
will be a particularly expensive endeavor if there is publicly owned ISP. When even the
most sophisticated cellular data plans have data limits and when 40% of US households
chose not purchase high speed Internet plans, action must still be taken to lower the price
of information. Again, universal Internet access is not enough to bridge the digital gap;
the utility of Internet access must also be equitable to truly experience its economic
virtues.
There is a discrepancy between the importance of speed and access in global
internet access expansion policy, arguably because unlike electricity where currents
strength is standardized, data rates and network management have not yet found
inflection points like Sam Insull did with the push for central supply stations. The
Internet needs a champion, like electricity had Insull. It is unacceptable, for example, to
receive this type message while writing this paper at one of the top 50 American
education institutions:
73 http://pewinternet.org/Reports/2009/15--The-Internet-and-Civic-Engagement.aspx
74 http://www.whitehouse.gov/blog/2013/06/06/what-connected

40
Figure 8
The business leaders, policy makers, and consumers that shape the Internet
everyday must look to the parallels of electrification to find reason to bring down the
price of accessing information, to be able to access it anytime and any place, and to be
able to realize maximum potential utility from all the economic power it has to offer to all
citizens of the world. Without access to this power source, the digital divide will stricken
societies into economic and knowledge poverty, a potential cost that has already been
unnecessarily realized by energy poverty. The tools to standardize, supply peak capacity,
and offer high levels of utility exist – now it is up to the will economic influencers to
truly bridge the digital divide, and maintain a steady path towards peace.

*Draft: Pathway to Peace through the Digital Divide

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