5G economics: Is the Internet in danger of splitting?

In a bid to control the internet of the future, some say a kind of digital iron curtain is descending. The United States is on one side, while on the other there’s China. Other countries are lining up, too. 

“There’s a divide, it’s not as simple as black and white, left or right,” explains Adrian Lovett, president and CEO of The Web Foundation.

“There’s an original internet that’s based on openness and permissionless space, which is associated with the pioneers of the internet; there’s a European internet emerging, which has some of those features but elevates a focus on privacy and protection of individual citizens – perhaps at the cost of innovation; and there’s a Chinese model, which is not only restricted to China, where the emphasis is on surveillance and social cohesion within that.”

“For the first time, more than half the world is online, and the other half are not. So there’s a real problem for the 3.5 billion people who don’t have access to the internet at all. We have to work on that. But for those who do, there’s a whole range of different experiences,” says Lovett. 

This is also a battle about 5G, or fifth generation wireless, the technology that increases the amount of data that can be transmitted wirelessly.

“For half the world, 5G is a pipe dream. While some people are worrying about getting into their driverless cars in the next few years, half the world is yet to send its first email. So it’s important to keep this in proportion,” he says.

For the first time, more than half the world is online, and the other half are not. So there's a real problem for the 3.5 billion people who don't have access to the internet at all. We have to work on that.

by Adrian Lovett, president and CEO of The Web Foundation

“The Web and the internet were intended to be for everyone and if you’re in a decreasing minority of your fellow citizens who are not connected when most of them (the world) are, then you’re missing out on some pretty fundamental things like being able to access some healthcare services, to vote, to participate in public life in various ways. So, 5G is not the solution to those kinds of challenges; 5G needs to happen in the right way.”

“But we also need just as much energy behind insuring that everybody gets connected, including the hardest to reach, including women who are less likely to be connected than men and less likely to be active online, and including rural areas as well as urban parts in the world. So, there’s a real job to do there, especially focusing on getting everybody connected.”

The battle for control over Venezuela’s assets

One of the main sources of money for Venezuela currently is an asset that lies outside of the country and is itself the centre of an international tug of war. Venezuela’s cash cow, which generates most of its foreign currency earnings is a refinery, called Citgo. It’s based in the US and there’s a big fight brewing over who controls it in the future.

Russia’s Rosneft owns 49.9 percent of Citgo through a $1.5bn collateralised loan. The rest is owned by Venezuela’s state oil company PDVSA. The cash it generates is crucial to President Nicolas Maduro and opposition leader Juan Guaido, who wants to replace the board.

The US decision to sanction Venezuelan oil assets two weeks ago was a move designed to keep Citgo revenues out of Maduro’s hands, which could present a challenge for Russian investments and claims.

“We’ve had a bit of Russian investments within Venezuela during the Chavez and Maduro presidencies, so there will be a question as to what claims Russia is making, what role it’s going to play, and how receptive all the other players in Venezuela are to Moscow’s claims in that sense,” according to Daragh McDowell, the head of Europe Research, and principal analyst on Russia at the risk analysis company, Verisk Maplecroft.

“If there’s a change of leadership and Guaido takes over, there will be potentially some sort of claim to dismiss a lot of the obligations made under Chavez and Maduro as illegitimate. Russia will naturally fight that legally.”

McDowell says that “the question of which claim will actually be out, in the end, is something that’ll take a long time to resolve through international institutions, but this shows the kind of spoiler role that Russia can play in the country at the moment. It certainly doesn’t have the resources to save Maduro at the moment or stabilise the situation in Venezuela, but it has enough of an interest to make any sort of transition difficult and that’s the card that Moscow is probably looking to play over the coming weeks and months.”

According to him, the ownership of Citgo could turn into a legal tussle, “which is why we’re seeing the limited Russian presence at the moment, why we’re seeing private military contractors on the ground, why we’re seeing this rhetoric from the Kremlin about the sovereignty of Venezuela and not wanting to back regime change … it’s a signal to the US, the EU and other powers that Russia does have interests in Venezuela that should be respected or compensated for somehow, or otherwise, Moscow can look at these legal options.”

Also on this episode of Counting the Cost:

Venezuela health: A hospital in Venezuela has said 14 children have died this week following an outbreak of amoebiasis, a form of dysentery transmitted by contaminated food or water. Hospital workers there say there’s a dire need for medicine, as Teresa Bo reports from the coastal city of Barcelona. 

Senegal currency: Senegal’s currency has become a topic of debate before its presidential election at the end of this month. The CFA franc was introduced by France in 1945 and is used by 14 West African nations. Some Senegalese are opposed to it saying it is a legacy of colonialism, as Nicolas Haque reports from Dakar.

Vanuatu climate: For the people of Vanuatu, rising sea temperatures, intense cyclones and erratic weather patterns are becoming a daily part of life. They are being forced to spend more money not only on protecting themselves, but also keeping their businesses afloat. And now, Vanuatu is considering legal action against big polluters thousands of kilometres away, as Andrew Thomas reports from Port Vila.