Peter J. deBlanc < pdeblanc@usvi.net >
Magen's Bay, St. Thomas, is the hub for the largest confluence of submarine cables in the region. Fiber service extends from this hub to North America, Puerto Rico, South America, and Europe. More cables come on line each year.
Internet connectivity, however, must come from North America. The tariffs and policies of the communications carriers result in a high price for connectivity. Typically, a T-1 circuit from St. Thomas, VI to Miami, FL, costs $15,000 to $20,000 per month , depending on the carrier and contract. Academic, governmental, and personal Internet use in the region is extremely limited, mostly by uucp and other dial-up connections. The costs of setting up, maintaining, and managing an Internet hub/service provider operation would result in service fees higher than most of the region's potential users could pay.
The paper describes the creation and development of USVI.NET, an Internet hub / service provider for the region using a FreeNet as a basis for attracting the necessary interest in Internet connectivity in the U.S. Virgin Islands. Providing the services to users at no cost, attracting donations of equipment, software, programming services and support, builds the operation to a point of 'critical mass'. The users of the service then induce the organizations with whom they are affiliated, into Internet connectivity. While individual FreeNet users do not pay, any organization on the network does contribute to cost- sharing. This method builds the network to and throughout the U.S. Virgin Islands to a self-sustaining economic basis.
Initial funding for the start up comes from a public sector-private sector partnership. Octagon Consultants teams up with the local Public Broadcasting System (PBS) affiliate WTJX-TV. (PBS is moving into distance learning using 2-way VSAT data technology).
Connectivity to USVI.NET from North America is via a combination of terrestrial fiber cable links to SURA.NET, and satellite data links via PBS.
The network is subsequently extended south, using 56 K lease lines connecting other Caribbean islands and reaching to Guyana, South America.
Through partnership arrangements with various local operating telephone companies, co-located CISCO async routers with dial up modems allow connections on each island without the necessity of long distance phone charges.
Calvin Bastian, V.I. Public Television, and Richard Hanscom, VITELCOM, will be available to expand on aspects of the partnerships from the perspective of their respective organizations.
1. Introduction
2. Regional Background
3. Telecom Costs in the Region
4. The U.S. Virgin Islands Advantage
5. Mission Statement
6. Narrative
Author Information
Special Thanks
While there is a large (by Caribbean standards) educational institution here, the University of the Virgin Islands, the cost of connectivity was prohibitive within the constraints of their operating budget.
The government agencies and the commercial business community, many of whom have local area computer networks as a part of their management information systems, did not even use electronic mail. Access to Commercial on-line services, such as Compuserve and America On-Line, required, in addition to a paid membership, the use of a long distance telephone modem call with a day rate of at least 25 cents (US) a minute to connect. Consequently, an extremely limited number of residents had any personal experience with these services. The federally funded National Radio Astronomical Observatory installed its Very Long Baseline Array in St. Croix in early 1994 caused the first Internet line to come into the Territory on a subsidized basis.
The University made an arrangement with NRAO to piggy back on that line. For the first time in the history of the U.S. Virgin Islands direct Internet access was possible, albeit in only a few places.
This situation provided the author with an opportunity to design, develop and test a socio-economic model that, if successful, would bring widespread awareness, desire, and ability to pay for Internet connectivity to a geographically isolated, underserviced population of information have-nots, the people of the U.S. Virgin Islands.
The model would then be adapted and expanded to include the entire Caribbean region.
Table 1 shows the significant events in the history of this exercise.
Table 1: Milestones
1992 . . . . . . . . . No Connectivity
1993 . . . . . . . . . Internet plan designed
WTJX + Octagon
Partnership Formation
September 9, 1994 . . FreeNet goes on-line
March 9, 1995 . . . . USVI.NET on-line
April 9, 1995 . . . . 1,000 FreeNet users
April 28, 1995 . . . . Results are published
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The Caribbean includes independent states as well as dependent territories or commonwealths of the United States, United Kingdom, France, and Netherlands. These entities maintain their own customs, immigration, tax schedules, and local governments. The national economies of most of these states prior to the mid 20th century were still agrarian and trading based, highly profitable to those in control of the industries. Today the major industry is tourism, with the all the attendant seasonal variations in cash flow.
The Caribbean Region technically includes the island nation of Cuba, and those states in the Caribbean Sea south to the north coastal areas of Venezuela, Guyana, Surinam, and French Guyana. Bermuda and The Bahamas are not part of the Caribbean Region.
Country Status ------- ------ Antigua & Barbuda IND Aruba IND Barbados IND Cuba IND Dominica IND Dominican Republic IND Grenada IND Guyana IND Haiti IND Jamaica IND St. Kitts & Nevis IND St. Lucia IND St. Vincent & The Grenadines IND Anguila UK British Virgin Islands UK Cayman Islands UK Montserrat UK Turks & Caicos UK Guadeloupe FR Martinique FR St. Barths FR St. Martin FR Bonaire NA Curacao NA Saba NA St. Eustatius NA St. Maarten NA Puerto Rico US U.S. Virgin Islands US
The U.S. Virgin Islands forms the top of a chain of islands extending south to Guyana, South America, and are generally known as the Lesser Antilles, or Eastern Caribbean. English is the predominant language. Most of the island states were or are British Territories. The monetary system is the EC Dollar, fixed to the U.S. dollar at a rate of about $1.00 EC to $0.40 US.
The Eastern Caribbean is a difficult place to succeed when it comes to business and trade opportunities. High import duties on almost all goods, restrictive taxes, government controls on private enterprise, and expensive logistics, including shipping, telecommunications, and costs of inter-island transportation make doing business, whether local, regional, or global, extremely complicated and expensive.
Other states in the region essentially belong to France or the Netherlands. They share the same logistical difficulties, and even more convoluted telecommunications problems.
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The French islands, Martinique, Guadeloupe, and the French side of St. Martin are serviced by French Telecom, and The Dutch islands of Saba, St. Eustacia, and the Dutch side of St. Maarten (note spelling difference: it IS the same island), are serviced by LandsRadio.
Pricing policies of these carriers are based on perceived value, not cost. A DS0, 56K or 64 K circuit from anyplace in the region to the U.S. mainland can cost $ 2,000 to $ 4,000 per month. In many cases, the circuit is difficult or impossible to get, due to political or other non-discloseable reasons.
Compounding all this cost problem is the fact that, due to the lack of education in the region of the benefits and value of network services, there would be only a small potential user base to draw upon. Economies of scale require a large user base, so each user needs to pay only a very small portion of the overall cost. Major educational efforts would be needed to develop an awareness of Internet, leading to an increasing demand for service, and a wider user base.
When taken at face value, political or local economic factors, combined with the high cost of transport, to which must be added the cost of network operations, equipment, and personnel yield a simple conclusion:
The costs of setting up, maintaining, and managing an Internet hub/service provider operation would result in service fees higher than most of the region's potential users could or would pay.
Examining the situation more carefully, however, reveals that there is some percentage of the population that is so desperate for Internet access that they will pay any price. Another segment of the population is aware enough of the advantages of Internet communications and connectivity to be willing to pay for that access at certain price levels.
An understanding of exactly what those price levels are, how many people or organizations want or need service, and whether those entities are educational, government, or commercial, are what level of service they need or want, can help determine the extent and nature of the ultimate funding model.
Consider this example of creative access:
Long distance voice telephone rates from island to island average $ 1.00 per minute using direct distance dialing (DDD), even when the communicating islands are within line of sight of each other. Outgoing calls from the Islands to the U.S. or Canada can be as high as $ 2.00 per minute. Billing is in one minute increments.
Conversely, long distance rates from resellers and wholesalers from the U.S. to the islands can be as low as US $ .40 per minute, with billing in six second intervals (1/10 minute).
This disparity of rates has spawned a new industry in voice telephone service products. Long distance callback services in the U.S. provide discounted telephone service using computer operated machinery. The business operator, say in Miami, has a telephone switch, computer, a bank of local dial tone lines, and a wholesale arrangement with some provider of long distance service. A unique local phone number in Miami is assigned to each Caribbean customer. When the customer in the Caribbean, say in Antigua, wishes to place a long distance call, he dials direct to the Miami phone number assigned to him. The phone in Miami, attached to a computer, is allowed to ring once or twice, but is never answered. The Caribbean customer hangs up, paying nothing of course, because his call was never completed. Fifteen seconds later, the computer in Miami dials the Caribbean customer direct at a pre-arranged Antigua number, probably at a rate of US $ .40 per minute. The Antigua customer answers, and is immediately patched through an automatic switchboard that supplies a Miami dial tone. Using touch tone, the Antigua customer places the desired call anywhere in the world, perhaps even to a neighboring island, at a cost of $ .40 plus the U.S. long distance charge, plus perhaps $ .10 per minute for the stateside service provider.
This scheme, of course can and is applied to uucp mail and embedded file transfer services. A business on island "X" maintains a unix computer system connected to local dial tone with modems. Customers call in from their computers and deposit mail, files, etc. destined for Internet delivery worldwide. When the computer calculates that there are at least two minutes worth of data transfer, it calls a long distance call back service in the U.S. which is specially equipped for computer communications. The callback comes in to the Internet-connected stateside computer, rings once, gets detected, and initiates a program that calls the computer in island "X" and downloads the uucp traffic at the discount phone rates. The traffic is then distributed via Internet. Incoming traffic for island "X" triggers a modem call from the uucp server to island "X", followed by file transfer. The users on island "X" modem in periodically for mail. In the case of users with computer systems on line 24 hours a day, local dial uucp takes place automatically.
No lease lines are used locally, as this may cause Cable and Wireless to notice the revenue diverting activity and, ultimately, attempt to restrict it in some way.
This scheme does not stop with e-mail. The service provider on island "X" has a small thin ethernet network. Several 486 PC workstations running Windows , a TCP/IP stack, and software such as Spry 3.0 are connected to an async router. At the opening of the business day, a 28.8 K V.34 modem async SLIP connection from the router is made to a US mainland Internet service provider via a call back system at US $ .50 per minute, or $ 30.00 per hour. The customers of the business then "Surf the Web" at $ 20.00 per hour each. Only 6 users on the system yields an income of $ 120.00 per hour, or over $ 1,000 per day.
The story is passed along to illustrate the point that some users will go out of their way to get some level of service, and willingly pay up to some choke point. Some uucp operators are getting as much as US $ 300.00 per month.
Yet another class of potential users does not yet know enough to want Internet. Some of that group will be able to afford to pay when Internet is available, and some will never be able to pay. A combination of social responsibility and market development through education must be applied to this group to stratify and define the class of service that is appropriate.
Finally, the general hype, hoopla, and perceived desireability of certain aspects of Internet connectivity (high speed Web access) can cause the purchase or funding of sizzle to be easier than funding the steak (e-mail, ftp, gopher, text based workhorses).
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A duty free port, it is the only place in the region where the unique combination of open market economy, free enterprise, fully deregulated telecommunications, and income tax exemptions are available.
Toll free 800 service to the U.S. mainland, low cost shipping via the U.S. Post Office, special Federal and Local tax incentive programs, Free Port status, English language, U.S. dollar, and the protection of the US Flag makes the USVI an ideal place to build business and trade connections with the rest of the Caribbean.
U.S. stateside residents may write off the cost of business and convention travel to the USVI at the maximum percentage allowed by the US Internal Revenue Service.
These factors, plus the fact that the author is a 16 year resident of the USVI made St. Thomas, USVI an ideal choice as a base of operations for this networking project.
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Now, almost 30 years later, it's more than just getting exciting. The Caribbean networking project is already into its third year of constantly rising action, adventure, and excitement. What's more, it shows no signs of slowing down.
Moving to the Caribbean in 1979 to pursue a more relaxed lifestyle, I transferred my computer and management skills to solving problems for small to mid sized companies on various management information issues. While the solutions were often computer related, many times they were not. The single common thread that seemed to turn a lagging MIS department around, be it private sector or government, was improved communications and access to information. High telecommunications costs, logistic problems in shipping, delayed mail, and an island time clock aggravated the problems. Most computers were used as stand alone items, really just advanced calculators, catalogues, or word processors. Few computer users interacted with anyone or anything other than their machines in the work environment when it came to business information. On the other hand, social interaction in connection with other subjects, like interpersonal communications, family concerns, discussions of food, etc. are much more a part of day to day life in the islands than they are in a more developed area.
The institution of in-house electronic mail proved to be one of the most significant productivity improvements available to these organizations. Social interaction via e-mail as a training exercise proved to be fun and effective. From there, it was only a short step to remote office communications for electronic information transfer, software support, and remote mail.
One of my clients, Virgin Islands Public Television System, provided an opportunity to demonstrate how, in a relatively short time (one year), a small staff could become more productive through computer support. Because we were dealing with television and media professionals, fear of equipment was not an issue. Again, the addition of e-mail to the management operation proved popular and fun, even for those on staff who would not normally use a computer in their work. Several staff members asked me if it was possible to "e-mail" persons in other organizations, even elsewhere in the world.
July 1993
This experience gave me an idea for a "hook" to start a FreeNet in the Virgin Islands. Many local residents who would never touch a computer had, or would have, children going off to college. Most universities were on Internet. The possibility of free e-mail exchanges with the sons and daughters in school might get some of the 'hard cases' motivated to use a computer for telecommunications.
The Public Broadcast System (PBS) had recently announced that they were going to move into public service areas other than broadcasting. New on- line services would deliver distance learning for all ages, multi channel television, interactive computer communications, and facilitate educator interaction.
This was going to be accomplished via a computer network based on VSAT technology. I called the technical director of the PBS program, Dave Drucker, in my capacity as MIS consultant to WTJX-TV, the local PBS affiliate. Dave said that while the video and some store and forward data would be carried on VSAT, the full PBS experience could only be gained if the affiliate had a full time Internet Connection.
A few months of investigation into the costs of doing this yielded some number like $ 50,000 per year, just for the phone bill and the mid level network provider (SURANET), and it did not include any capital equipment or operating expenses. While V.I. Public Television could afford this as a start up cost, there was no way it could sustain paying out at that rate for services it would be giving away free.
That was the beginning of the plan.
A few weeks of work resulted in the plan to bring Internet to the U.S. Virgin Islands. We would follow the outline in my abstract, achieve the mission statement (Section 5, above), provide for public access to the PBS enhanced services, and aim for self-financing of the project within two years.
We would start a FreeNet, and provide free service to build a base of financial self-sufficiency!
Once the service was running, there would be a public access computing with Internet connectivity, a network operations center (NOC), a network information center (NIC), and a bridging and routing service for government and private sector. Sale of NOC and NIC, and connectivity services to the government agencies and the private sector would provide income to reduce the ongoing cost of operating the system.
January, 1994
I proposed my plan to Calvin Bastian, General Manager of WTJX-TV in St. Thomas. I offered to enter into an agreement to finance 100 % of the project capital equipment requirements, and 50 % of the operating expense in exchange for 50% of any government Internet services revenue that we could recoup by providing bridging, routing, and transport.
Our opening financial commitment to operating expenses would be targeted at one dollar ($ 1.00) for each person in the U.S. Virgin Islands, or approximately $ 100,000.00.
The contractual model used for the partnership was the cooperative agreement, the same one that put MERIT, IBM, NSF, and MCI together to develop NSF-NET.
The legal precedent already established, the VI Public Television Board Executive Committee agreed provisionally to go forward with the project. March 1994 The NRAO brought Internet service for their own use to St. Croix, USVI. By arrangement, a piggyback feed went to the University of The Virgin Islands St. Croix Campus, where it was routed over a UVI leased microwave circuit to the St. Thomas Campus.
I asked the NRAO and the University of the Virgin Islands for permission to run a 14.4K SLIP connection into their circuit until I could get new service for the V.I.P. FreeNet project. They agreed, on the condition that we would have our own service by March, 1995, when their (NRAO) contract for service expired.
May 1994
This was getting to be too much to do alone. I asked two of my co-workers, Steven Pitzl and Jonathan Bartsch if they would help me with the FreeNet project by donating a few thousand hours of their time. They agreed gladly, and came on board as systems programmer and systems administrator.
The next step was contacting the great gurus of FreeNets, Chet Ramey and Dennis Risen at Case Western Reserve University, the home of the Cleveland Free-Net, to request a copy of the FreePort software for 486/PC. Dennis explained that, since the software was not officially ported to the 486 platform, and there was no documentation, he would supply it but would rather load it himself. By the way, they ask for a contribution of $ 850.00 for that. Oh yes, we needed a computer also. I had a spare 486 motherboard, some RAM, and a tower case I could donate, but no disk, O/S, or multi-port I/O.
June 1994 A few quick calls to friends and local businessmen were in order. Frank McLaughlin got tapped for $ 850.00 for the FreePort software, Henry Wheatley and Richard Hanscom bought the BSDI O/S, and John Ackley provided us with a 16 port Boca Research I/O card. Parker Highsmith supplied a 500 meg SCSI disk. Teen age apprentices Jason Ackley and Wesley Joyce actually assembled the machine.
We sent Dennis Risen the 500 meg disk, and, after a few false starts, got the returned disk, with software loaded and (almost) running. A few hundred hours later we had it stabilized, and ready to demonstrate.
September 9, 1994
We got a few volunteers together, physically moved the FreeNet machine and 8 terminals, and set it up in a local hotel for a seminar conducted under the auspices of the Chamber of Commerce. Using a dial up SLIP connection we were able to demonstrate Internet access, sign up new members, and have everyone send President Clinton an e-mail to let him know the U.S. Virgin Islands had a public access computer system. The next day, we moved the machine, now named "virgin", to its permanent location in the office of Octagon Consultants, my consulting firm.
Appeals to local business owners brought funds to install telephone lines and buy modems. The local business gets a promo on login, announcing who is sponsoring the dial-in port. Eight sponsorships at $ 1,200.00 each take care of the modems, port costs, and local telco. By the way, a dialup business line is about US $ 65.00 per month here in the USVI. The first month of operation brought the FreeNet 162 new account applications.
Dates New Applications Cumulative ----- ---------------- ---------- 9/9/ to 10/8/94 162 162 10/9 to 11/8/94 109 271 11/9 to 12/8/94 188 459 12/9 to 1/8/95 110 569 1/9 to 2/8/95 130 699 2/9 to 3/8/95 108 807 3/9 to 4/8/95 201 1,008 4/9 to 4/28/95 135 1,143
While there is no requirement for users to pay for access or service, the V.I.P. FreeNet does request a $ 25.00 annual membership fee from the users who can afford it. Public access terminals are available in the lobby of WTJX-TV studios, and in the public libraries of St. Thomas and St. Croix. A donation from a local bank, Banco Popular, of an outmoded data center yielded 48 dumb terminals, modems, and multiplexers being used for public access. Additional terminals are being placed in public and private schools, with the lease phone line paid for by PTA groups, Rotary Clubs, and other civic organizations.
The V.I.P. FreeNet served as public access site for two U.S. national "Electronic Town Meetings", and will continue to participate in all such activities.
No grants, federal, local, or other government funds have ever been received to support the FreeNet. It is 100% supported by user donations. and the private sector.
V.I.P. FreeNet now has non-profit status, an active board of directors who meet almost weekly (in virtual meetings, of course), and has money in the bank and no debt of any kind.
March, 1995
The V.I.P. FreeNet Internet access was cut over to the new USVI.NET domain. A router was graciously supplied by Nadia Mansour, Latin America Regional Manager for CISCO Systems allows the integration of our terrestial fiber connection from St. Thomas to the SuraNet (BBN Planet) co-located Miami POP via MCI, with our VSAT Hughes Personal Earth Station Satellite link to PBS
With the V.I.P. FreeNet firmly established, a Web server project started in earnest. Virtual Tourism being what it is today, the U.S. Virgin Islands needed a presence on the Web.
The funding model works like this:
Industry associations such as hotel, charter yacht, bar and restaurant, etc. are asked to make an annual donation of at least $1,200.00 to the FreeNet. In exchange for this, the association receives a few web pages in the Official U.S. Virgin Islands Tourist, Vacation, and Business Guide. All members of those associations who have paid their dues get a short listing in the editorial pages of the Guide. The Tourism office and other private sector business then "sponsor" the Guide with advertising revenue. The revenue is used to defray costs of connectivity, operations, etc. First year revenue should be at least $ 50,000. The guide book provides for e-mail response to the associations, who then need an account on the system to receive and respond to the mail. Since this is a commercial activity, it cannot happen on the FreeNet. The cost of an account is U.S. $ 500.00 per month for such an association. The resultant $ 24,000 per year derived from this source further reduces the operating cost.
A continuous supply of web 'hits' is assured by running contests and giveaways. Each month a one week vacation for two is given away on the net to visiting "virtual tourists". The vacations are provided by the hotel associations.
April 1995
Critical mass! There are over 1,000 users on the FreeNet, out of 100,000 total population of the U.S. Virgin Islands. They're e-mailing each other, their children in college, participating in public forums and debates, accessing Internet resources, and generally having fun. The territory's civic organizations are using the Net to organize their activities and publish their calendars. The politicians used the FreeNet last November to solicit votes. One percent of the entire population and three percent of the workforce has FreeNet accounts. Everyone was wondering why all the government agencies don't get e-mail and publish public information on the net.
The new Governor of the U.S. Virgin Islands, Dr. Roy L. Schneider, MD, in his 100 day of office address, published his address in real time on the V.I.P. FreeNet. At the exact time of the speech, the text version of the address became available on line. Eight dial-in modem users and a dozen or so Telnet session users were able to read along, or even jump ahead as Governor Schneider's speech unfolded.
Governor Schneider is committed to instituting electronic communications, joining the information age, and has ordered Internet service for his office and staff. Governor Schneider maintains a FreeNet account.
The government tourism office (info@usvi.net) becomes the first cabinet level division to request Internet service. There are obvious reasons, the Virtual Tourist needs a response to their e-mail about visiting the U.S. Virgin Islands. This is just the beginning. That one account contributes another $ 12,000 per year to the cost sharing. Next comes the hosting fees for posting government information, databases, and public notices. Not only do these activities contribute to the cost- sharing of the Internet hub, they also reduce the cost of providing government services.
The viability of the operation is now assured, and the operating costs are covered at minimum levels. It is now time to add capacity, increase bandwidth, and extend the reach of the system further into the Caribbean.
The next strategic partnership will bring in an international telecommunications company in some type of joint venture to deliver full Caribbean outreach.
Integral to the outreach program will be connectivity to the V.I.P. FreeNet from other Caribbean islands. A large percentage of the U.S. Virgin Islands population has roots in the other islands of the region. Again, e-mail will form the core interest building tool, followed by participation in country specific and regional forums. The net can be used to stimulate intra regional and extra regional trade, deliver distance learning at affordable (free to some) prices, and increase the speed of consensus formation about new ideas.
The only thing that remains to be seen is whether certain established telecommunications monopolies will allow this funding model to work in their protected territories. It is ultimately up to the citizens of those territories to create a ground swell of demand that cannot be ignored. Stay tuned.
Our Web server is http://www.usvi.net/
A dynamically updated version of this Project Document is available at http://www.usvi.net/cobex/
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Mr. de Blanc's public service activities include serving on the board of Rotary, and the Kids and the Sea Foundation. He is the Founder of the V.I.P. FreeNet, promotes the Internet and the Internet Society in the Caribbean via writing and speaking engagements, and writes a computer column; "Byteline" for the Virgin Islands Business Journal. For relaxation, he plays pop and classical music on baroque English recorder. Mr. de Blanc is married to Dotty Sparks-de Blanc, a Chartered Financial Analyst and Internet columnist for the Exporter Magazine published in New York City.
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