has fallen behind in high speed (broadband) Internet access. Less than 6 % of all local connections to the Internet could be considered broadband, about a third of the level in the United States and a tenth of the level in Korea. A vast majority of all local connections occur at less than 56 Kbps, not realizing the full potential of the Internet.

As the Internet becomes one of the primary communication channels, the use of audio and video increases. Businesses can communicate with suppliers and clients using video conferences directly form their workstations. Universities can offer distance learning courses with students in different parts of the world. Movie and music companies can reduce DVD prices selling or renting them on the net where production and distribution costs are minimal. Even on our daily life we can see an impact. When looking for news it is much more effective to see and hear events and even interact with reporters on real-time broadcasts. Modern messaging software allows us to see our relatives while we talk to them, at a much lower cost than the videophones promoted several years ago by the phone companies. Yet, all of this is not practical on 56 Kbps links. MPEG videos using a partial screen require around 512 Kbps, while a full screen display with VHS quality can require over 1,500 Kbps. And these levels are just the beginning. As new applications are released to take advantage of broadband connections, we will see speeds over 10,000 Kbps on home connections. One organization even proposed recently a goal for a typical connection of 100,000 Kbps in the US by 2010.

Favorable government policy is key to promote fast propagation of broadband connections at a low cost. This policy is important since with a better infrastructure, Puerto Rico will not only be more attractive to industry but will also promote the development of its people on this new medium. Instead of falling behind and wait to catch up, our goal should be to place Puerto Rico in a leadership position and have our people on the forefront of Internet use.

Currently there is no governmental commitment in this area and no incentives for better facilities or free competition among providers. There are over 250,000 Internet connections on the Island at speeds of 56 Kbps or less. The only ADSL provider is the phone company whose most popular offering is a 256 Kbps account at $ 59.95 per month. Although this alternative may appear attractive compared to 56 Kbps offerings, it is slower and more costly than existing offerings in the US and Korea. Even though a great portion of the phone infrastructure for ADSL goes via public land, the phone company does not allow subscribers a choice of ISP for their connections, forcing them to accept the service and rates of their own Internet service, in effect monopolizing the local ADSL service.

Rev: Oct-24-02