The Caribbean demonstrates how Big Tech abuses nations and telecom operators around the world

Strand Consult’s new study Gigabit Caribbean: Closing the Investment Gap in Fixed and Mobile Networks illustrates how Big Tech’s free riding on broadband networks is a form of digital colonialism. Like colonizers of old, Big Tech claims it is doing good while it extracts revenue and data from the region without paying tax, regulatory charges, or network usage fees. Caribbean policymakers should take action to secure the digital future of the region.

Financing broadband networks is a global hot topic. The world lacks some $2 trillion in network investment, and one-third of the world’s population remains offline for lack of income and/or network availability. Broadband network providers experience that the cost to manage video traffic in their networks grows faster than revenue, and they can’t raise prices to manage cost. More largely, the business models to recover network cost were enshrined before video traffic began to predominate. These challenges are exacerbated in emerging countries with high cost for capital and energy. 

Strand Consult explores these issues in an important emerging region of some two dozen nations and 45 million people, the Caribbean. Its new report “Gigabit Caribbean: Closing the Investment Gap in Fixed and Mobile Networks” describes the economic challenges, quantifies the Gigabit broadband investment gap, and suggests policy solutions. The report is part of Strand Consult’s Global Project for Business Models for Broadband Cost Recoverywhich has examined these issues in a series of reports with original research. Strand Consult  has examined detailed broadband cost recovery policy in many countries and regions including the USA, South Korea, Brazil, Africa, United Kingdon, EU 27 and other countries.

The Caribbean Gigabit Society defines universal connectivity for all people of the Caribbean at 100 Mbps for the purpose of enabling employment and economic development through the take up of advanced digital goods and services; global competitiveness in making the region attractive for investment; and the rollout of high capacity fixed and mobile networks.

The report puts the set of sovereign yet interdependent Caribbean nations in geopolitical and economic context. The United Nations categorizes the Caribbean as Small Island Developing States (SIDS), a distinct group of nations which face unique social, economic and environmental vulnerabilities. These challenges are described in part in Strand Consult’s research note The Caribbean is a microcosm of Big Tech’s digital colonialism. Small and medium-sized emerging countries are profitable to exploit. Here are some of the conclusions in Strand Consult’s report:

• To investment gap to realize the Gigabit Caribbean Society is USD $8 billion – 13 billion.
• 15M people in the Caribbean are offline and not connected.  
• The Caribbean mobile telecom and broadband industry earn annual revenue in excess of USD $2.6 billion. They are registered in the region, pay the local tax, apply for regulatory and licensing fees, employ local people, and invest 18% of revenue in infrastructure in the Caribbean.
• Big Tech firms Alphabet, Meta, Apple, Amazon, Microsoft, and Netflix in in excess of $11.5 billion in the Caribbean yet pay no tax, no registration, no regulatory or license fees, nor local salaries, or local investment.
• Broadband telecom providers make significant investments every year in the Caribbean; Big Tech uses Caribbean networks while paying little to nothing, the textbook example of a free ride.
• Big Tech’s digital colonialism undermines the economics for the Caribbean broadband telecom and broadcast/media industries. Local players support the local economy while Big Tech free rides.

Strand Consult’s report describes market-based cost recovery business models which could be implemented without taxation based on principles of reciprocity, equity, transparency, efficiency, and affordability. Government subsidies and universal service funds like in USA (universal service funds or USFs) are non-starters given the scale of the requirements and the efficacy of regional tax collection and distribution. Importantly governments can play a role to ensue good faith negotiation for the delivery of network traffic. Consumers themselves cannot cover the full cost of broadband networks. Only when the largest networks users participate in cost recovery will business models work to close the digital divide in the Caribbean.

Strand Consult’s report “Gigabit Caribbean: Closing the Investment Gap in Fixed and Mobile Networks”is the first of its kind to detail both mobile and fixed line broadband data in a granular level for the Caribbean; it provides a helpful overview and specifics of broadband in the Caribbean.

Strand Consult has studied the larger policy changes for broadband investment around the world for more than two decades. The Caribbean represents a salient example of Big Tech’s free riding in which it can extract some $12 billion annually without paying any tax, registration, salary, or usage fee. Big Tech has short arms and deep pockets; Caribbean policymakers should take action to secure the digital future of the region.

Order Strand Consult’s new report “Gigabit Caribbean: Closing the Investment Gap in Fixed and Mobile Networks”now.