Africa is currently at a crossroads with respect to broadband policy.  Multiple submarine cables will come online around the continent over the next several years, radically changing the economics of high-speed Internet delivery and driving significant investments in domestic and regional telecommunications infrastructure.  Competition in these markets is highly imperfect due to the high fixed costs necessary for entry, and positive externalities create suboptimal allocations.  These market failures necessitate government intervention.  If African governments are not poised to both properly regulate markets and incentivize adoption, a significant opportunity to promote development could be lost.  

The Korean example, where the government was heavily involved in fostering broadband adoption, provides several key lessons with respect to regulatory regimes, infrastructure supply, demand promotion, and institutional configurations conducive to policy execution.

First, the regulatory regime in Korea created an environment where competitive pressures pushed down broadband prices to levels that enabled adoption to take off.  Easy entry for ISPs was crucial, as well as regulation that enabled providers to utilize existing cable infrastructure.  The case of Korea highlights the need to remove regulatory barriers, such as limiting the number of licenses and restricting service provision.  Equally critical is ensuring new entrants can utilize existing infrastructure, without this capital investment becomes a limiting factor for competition.

Secondly, the Korea case demonstrates that appropriate regulation is not sufficient.  Regulation corrects for imperfect competition, however the existence of coordination failures provides a case for the government to play a role in promoting the supply of broadband infrastructure.   In Korea pre-payment of access fees for public institutions financed the build out of a national backbone.  Additional incentives such as favorable tax rates, subsidies, and low interest loans were used.  While the Korea case highlights the need for a government role in supplying infrastructure, the appropriate model is highly dependent on the dynamics of a particular market.   Depending on the size and maturity of the market, as well as the capacity that exists within the implementing institutions, the government may fully or partially own infrastructure, or offer financial incentives to private parties.

Third, Korea’s case underscores the need for government to play an active role in demand creation.  Demand-side policies are often overlooked in broadband policies or limited to e-government initiatives.  The Korean government engaged in multiple programs to promote demand, including subsidizing ICT training, computers, and access, as well as requiring computer literacy for college entrance exams.  Demand promotion is even more critical in African countries, where low literacy and limited access to computers impede demand.  However, innovation models should be deployed specific to the African context.  For example, village Internet operators could be deployed to bring exposure to the value of the Internet and train people with basic IT skills.

Finally, Korea’s institutional configuration enabled it to execute on its ambitious ICT policy.  While Korea’s institutions were far more complex than would be realistic in a developing country, a few key lessons are relevant.  Most importantly is the need to centralize responsibility for telecommunications policy in a single ministry, with support from the highest levels of government.  Additionally, Korea’s practice of appointing a Minister of Communications and Technology with a strong ICT background ensured that policy makers understood the incentives of the private sector.