Using Distance Learning to Facilitate the Transformation of the Regulatory, Business, and Social Environment in RusiaMikhail Kazachkov Peter Knight Paper prepared for the Second International Conference on Distance Education in Russia, 2-5 July 1996, Moscow, Russian Federation. The opinions expressed are those of the authors and should not be attributed to the World Bank or HRN. Abstract Distance learning is one of the most critical applications for Russia's social and economic development -- in great part because of its potential as a catalyst for the development of both physical and regulatory infrastructure and of the nation's future. It holds the promise of bringing together a variety of interests from all corners of the Russian nation. The development of an appropriate regulatory and business environment that supports the increased penetration of distance learning will be a significant challenge, certainly as significant as building a telecommunications infrastructure adequate for the task. But while these two ""how" questions are clearly important, no mobilization of resources adequate to tackle them is conceivable without a compellingly visionary answer to the "why" issue. Distance learning, at least in Russia, can be a key element of such a vision. This paper examines some of the specific issues surrounding the introduction and development of distance learning in Russia, examining a number of policy implications and outlining a broad strategy for linking political, business, military and community interests and resources in support of distance learning services. Introduction The links between telecommunications development and the social and economic transformation of all countries throughout the world are of increasing concern to policymakers in government, corporate and academic institutions. Applications like distance learning, which link together certain kinds of hardware, software and information content, are the centerpiece of many strategies to enfranchise citizens and induce economic growth. A vision of advanced telecommunications infrastructures can act as a powerful motivator for the development of public policy. But telecommunications in Russia, like in many countries throughout the world, has not been driven by this kind of vision. Telecommunications under the Communist regime was more concerned with control rather than the free flow of information. In turn, Russia has not succeeded in pushing penetration rates of critical telecommunications and information applications up among residential and rural users. The profit motive has squeezed the goals of development out of the investment process. There are pockets of advanced telecommunications infrastructure that, technically speaking, could support socially useful applications like distance learning. But most of that capacity is solely at the disposal of corporate users in Moscow and very few other major urban centers, or in the hands of the military. At the same time, the Russian telecommunications environment has become fragmented through the investment patterns of foreign competitors and the privatization strategy implemented by the Russian government. Local needs and interests have prevailed over national imperatives, and regulations articulated by government agencies have had clearly deleterious affects on the competitive environment and the rollout of new technological infrastructures. The inability to craft a coherent telecommunications development strategy for Russia has frustrated leaders in a variety of critical positions within Russia, especially those in the technical sciences and educational communities. These are the people who are building the future of Russia, protecting the valuable research and capabilities of the past, while educating the next generation of leaders and building an appropriate technological infrastructure of the country. These are the people who are left out, and need access to the hardware and software of distance learning and other telecommunications applications. The other group controlling similarly valuable telecommunications material and human resources -- the military -- also finds itself excluded from some critical parts of the discussion about advanced telecommunications infrastructures. Faced with decreasing defense budgets, portions of the military-industrial complex have decided to participate directly in the commercial development of telecommunications services. Although it is not a traditional role -- or forte --for the military to provide such services, the military's interest in telecommunications development illustrates the importance of the resources and capabilities which this interest group can bring to the development process. These two groups are not natural allies. On the other hand, it is not clear at all that either one of the two groups on its own has enough influence to ensure policy changes for the rapid development of infrastructure adequate for a viable telecommunications sector of national economy -- or even just for distance learning. A vision powerful enough to bring the educators and the military into the fold of a common advocacy for the rapid development of human and informational resources of Russia could ensure "the impossible"-- amid all the shortages and temptations of populist politicking, the Russian Federation just might find the wisdom and determination to provide for the nation's future in the coming information age. What is lacking is a rationale for a different kind of telecommunications development, one based on the values of open competition and social utility which could support the efforts of the best elements of Russian civil and economic society. Even the Russian Ministry of Communications has begun to notice the difficulties inherent in the present course of telecommunications development; potentially crippling regulatory and structural imperatives have been introduced into the system and Russia does not have the time or wealth to suffer through the consequences. Part of the answer to this is better public policy. One clear lesson of the privatization and liberalization of telecommunications infrastructures throughout the world is that policy does make a difference; government and international institutions can dramatically affect the course of market evolution through the public articulation of key value propositions. By choosing to emphasize and invest in specific applications and programs which demonstrate a commitment to certain kinds of values, good public policy affects the attitudes of people and provides the tools for individuals to affect positive social and economic change. But the problem for Russian policy makers, especially in this year of popular elections to both branches of government, is: What comes first, the pressing and immediate social or the longer-term economic needs of the nation? The interplay of relative priorities of these values will drive the development of appropriate institutions for regulation and investment. This is true in general but especially with regard to the telecommunications development of the country. Such tradeoffs of the present against the future cannot be but a "chicken and the egg" -- or, to put it in terms familiar from the Soviet times, a "dialectical" dilemma. The key is to find an example or "policy" where public-accountable government and bottom-line-accountable industry can come together to ensure the health of the still young and relatively feeble "chicken" and at the same time protect the golden ""eggs" it is to lay in the future. We believe distance learning could do exactly that. It is a socially responsible purpose capable of justifying a complete review of the development policy for Russia's telecommunications infrastructure. In this regard, distance learning is perhaps the most important application to be examined on this struggle for access to resources and capabilities. The most significant potential impact of distance learning comes from its role as a tool for education -- not just in the classroom, but potentially throughout the whole society. If we are to believe that the development of all countries, but especially those undergoing the transition from totalitarian regimes, depends on the inculcation of certain values and socially held beliefs, then distance learning represents a critical opportunity to facilitate the transformation of Russia. At the same time distance learning requires an infrastructure of telecommunications and information technologies developed enough to serve as an attractor and catalyst for investment and growth into the strategically most important sectors of Russian economy. This infrastructure can also help protect legitimate national security interests without putting additional strain on an already tight military budget. It is our conjecture that while no single interest group in the Russian society today -- be it the military, the education community, or the still young telematics industry -- is capable of formulating and then seeing through a regulatory reform that would ensure uninterrupted growth through adequate investment into the telecommunications and informatics industry, jointly they can do it. And in so doing they can help with the conversion to civilian use of parts of the military-industrial complex having valuable telecommunications and informatics skills. In our opinion distance learning can become the rallying cry capable of mobilizing enough interest groups to constitute the critical mass required to ensure the future of Russia in the rapidly-coming information age. To understand how that possibility can become a reality, it is important to begin with a discussion about how distance learning fits into the regulatory and political environment in Russia. Distance Learning and the Regulatory Environment for Telecommunications Policy There is a broad undercurrent of concern that the pattern of telecommunications development in Russia is not focused on enfranchising citizens by providing access to telecommunications services. For key constituencies, such as educators, the military, and key government officials, there is a real though perhaps not yet consciously realized thirst for policy direction and corporate strategy that serves the country as a whole, rather than a small portion of the elite. The Pattern of Russian Telecommunications Development The pattern of Russian telecommunications development clearly shows the disenfranchisement of the information ""have-nots" in favor of the needs of corporate and business users. This pattern has become clearer as the impact of Russia's privatization program on the telecommunications sector has become more apparent. Privatization has been mostly "sharization," with shares being collected by managers, large investment houses and government entities during the process. This has also been the case in the telecommunications sector. RosTeleCom was first spun off from the Ministry of Communications and then broken into operating units according to local geographies. Each of these local telephone companies was privatized separately from RosTeleCom, which eventually became the established monopoly provider of long-distance services in the country. The Ministry of Communications officially holds shares in both RosTeleCom and the individual, local telephone companies, and governments at the oblast and city level also own shares of the local telephone companies. The problem is that no one is quite sure who owns what percentage of which company, and this difficulty has already caused the collapse of negotiations for the sale of government shares in local telephone providers. Additionally, a number of "investors without capital" have also played a central role in the privatization process, mostly through their ability to leverage local knowledge of the telecommunications industry and infrastructure. For example, there are few, if any published figures on infrastructure investment, and no central depository of knowledge as to what and where the actual telecommunications infrastructure in Russia is. As a result, people who have that knowledge are able to offer access to strategic portions of a network, such as a switch in one city or a long-distance copper line between two cities that no one else is aware of and no one is using. The quid pro quo that comes in exchange for such knowledge is a portion of the returns from the sharization process. Because of this weakly-defined ownership structure, managers have been able to exercise a wide latitude in establishing services and using revenues. The telecommunications sector has begun to suffer as tomorrow's investments in Russia's future are sacrificed at the altar of today's profit potential. Few speak of a broadly-based consumer market for telecommunications services. Every company concentrates on applying existing models of telecommunications services to skim the cream from the telecommunications market. The telecommunications industry is much too large and tied into the existing political infrastructure to be immune from such difficulties. The close relationship between political and industrial managers is reinforced by the money-making potential of telecommunications services and the politics of any communication infrastructure. If competition is to flourish in the Russian telecommunications sector, it will have to begin by a redefinition of ownership and the goals of investment at the grass roots level. For investment in distance learning, the same rules apply -- connecting distance learning and other telecommunications applications to the grass roots level will be the critical difference between success and failure. The pattern of investment and planning around distance learning shows that there may be some hope. Efforts are underway, though, to build awareness of how distance learning can be implemented. Institutions like the Soros Foundation have already committed money to the development of Internet access points for major educational institutions. The commitment has already evoked a strong government response -- 30 percent of the total investment in the network backbone will be matched by the public sector. If similar kinds of public sector and foundation investment can be targeted and put to use, a distributed infrastructure can be established that runs parallel (and even independently, if necessary) from the existing political and economic interests that dominate today's telecommunications network. Institutions like the World Bank can play a key catalytic role-- one that is based not only on their ability to lend money and to "prime the pump" for further investment, but on the symbolic authority they can bring to bear on the question of social evolution and economic values appropriate for a well-functioning market economy. By combining investment with a conscious, vision-driven set of policies that draw people into a more participatory social and economic future, the World Bank Group, and other international agencies like the International Telecommunications Union ((ITU) and UNESCO, can help to develop a strategic alliance among the broad array of institutions within Russia and throughout the world that want to contribute to this brighter tomorrow. With the development of the physical infrastructure through grassroots investment and building the telecommunications capabilities of specific educational institutions will come a variety of potential content sources. Under development in Novgorod, for example, area variety of multimedia teaching tools that eventually can become the backbone for certain kinds of distance learning applications-- perhaps not the full-motion video envisioned by some technologists, but a lower-bandwidth version which specifically meets the critical needs of Russian educators, namely access to educational resources and research materials. Public Policy and Sustaining Investment These first small steps represent promising models for bypassing the dominant commercial and political interests in developing a new kind of network that meets the need of a broader Russian community. But the progress to date can only be sustained through good public policy -- and there are only a few constituencies with the social capital necessary to "sell" good policy solutions to the appropriate audiences. Of these, still fewer have any coherent vision reaching beyond the immediate economic benefit of the sterile technological enthusiasm. This is, in great part, a situation endemic to the developing world, but specific circumstances in Russia make the development of an alliance for policy reform more difficult. First, there is a lack of information about telecommunications policy issues among the most influential Russian leaders; without common definitions and basic facts and figures, it is almost impossible to create an argument which encompasses the diverse interests and views of the telecommunications sector. Second, one of the legacies of Russia's totalitarian past is general belief that "nothing can be changed anyway" because there are no mechanisms for changing it. The general public of Russia is even less informed. Consequently it is totally unaware of why and how apparently arcane technological policy decisions in the field of telematics would affect their personal -- as well as national -- future. In that regard, information about the telecommunications sector needs to be integrated into a broader road map, which shows possible direcons and "solutis" for existing regulatory difficulties and market failures. That said, one must stress that -- as distinct from the nations of developing world -- Russia has an enormous advantage of a populace remarkably well educated, and in particular in hard sciences and technology. This means that Russians are fully capable of grasping the significance of the looming telematics policy choices. The only thing that is standing in the way of creating an educated national consensus on these issues is the lack of a public awareness campaign, involving mass media and, in particular, television. For the past few years the authors have been advocating such a campaign as a very high priority both for the Russian government and for international organizations. Distance learning could be positioned at the very heart of such a proposed campaign of public education. As an application with broad-based appeal, distance learning represents a possible opportunity to overcome these barriers and establish a new, broader constituency for telecommunications reform in Russia than would be possible by mobilizing only the narrowly-defined telecommunications sector and its suppliers. This is true, in part, because of the nature of the application itself and some of the technical realities of implementation. Distance learning, like many telecommunications applications, represents an opportunity to emphasize horizontal linkages between people and institutions over the vertical relationships of control embodied in Russia's totalitarian and authoritarian past. This kind of relationship building will be particularly important for Russia; in an environment where each person was separated from every other person in a calculated attempt to atomize, fragment and frighten society into submission, using technology to enhance social linkages can only be a positive influence. If technological iestment facilitates social change, and we want an open and participatory society for Russia, we will need an open and participatory technological infrastructure with applications that reflect this moral direction. This is why distance learning is a key ""battleground" for telecommunications development and social transformation. As a potential conduit for all sorts of information, ensuring the success of distance learning can offer a model for government and corporate policy. But it also represents a threat to existing interests that have profited from the continued fragmentation of both Russian society and the Russian telecommunications infrastructure. Any attempt at integration will be fought from a number of different corners -- and the advocates of social change will have to be prepared for the battle that lies ahead for distance learning and other applications that can bring connectivity to a very disconnected country. Recommendations for Public Policy and Investment Strategy The present commercial and political environment in Russia would seem to indicate that the appropriate strategy for the development of distance learning and other educationally-focused applications for distributed telecommunications networks is one that focuses on the grass roots: linking individual institutions together using public or private sector funding, then linking in other institutions able to develop appropriate content for those networks. But there are a variety of barriers to the implementation of that strategy. This section offers specific recommendations for public policy and investment strategy to help build distance learning as a key application for economic and social transformation of Russia. Public Policy to Drive Grass Roots Development Public policy and government attempts to regulate the telecommunications sector have become increasingly responsible for the financial weakness of service providers and the thin penetration of services. The friction between local investment and mandate is running up hard against the walls of bureaucracy and restriction put up by the Ministry of Communications and other government agencies. Distance learning will have to be presented as an opportunity which can supersede this institutional friction because of its strategic importance for the future of the country. Though the implementation of distance learning applications, a model for unifying the information and telecommunications ""space" in Russia can be set with the following kinds of public policy initiatives. Develop an open communications environment. This is critical to the success of distance learning in Russia. Without defining the regulatory and political parameters for interconnection, management of infrastructure resources, and accountability to investors and shareholders, the telecommunications market will continue to be marked by business deals and practices that erode the ability of information have-nots to participate in Russia's continuing economic and political revolution. The Russian government can take a step in the right direction by working with individual providers and regional governments to identify key infrastructure assets that can be dedicated for use by educational institutions as part of a national education network. Similar to the National Research and Education Network (NREN) proposals in the United States, this initiative could either be rolled out as a private-public sector partnership, or one that requires a certain percentage of infrastructure development by private sector companies be targeted to the needs of specific educational institutions. Private sector companies participating in this program would work together to ensure the seamless interconnection of the various pieces of the infrastructure, setting pricing and carriage rates to ensure that there are some revenue streams associated with the investment. The government can use the interconnection and ownership agreements that are derived from the program as a model for applying telecommunications capabilities to the requirements of other industry sectors. This will allow Russia to use the public policy surrounding distance learning and other educational applications for distributed networks as a model for the ongoing transformation of the telecommunications sector and the entire country. Encourage decentralized regulatory reform within a broad national policy framework. Any national distance learning strategy will need to be reconciled with the political and economic interests of individual localities. Considering the preeminent role of the localities in the present telecommunications development of Russia, innovative public policy in this area will be critical to the success of the reform of the telecommunications sector and the penetration of distance learning applications. Regulation in telecommunications that cedes certain responsibilities to localities in exchange for performance and increased investment in nationally set goals and objectives may provide an appropriate balance. Considering Russia's long-standing history of regional development and strength, the national government perhaps should view itself and its role in the telecommunications sector as being a facilitator of achievement rather than a dictator of standards. By identifying certain applications, like distance learning, as high national priorities, and providing further space for local regulatory reform to those jurisdictions able to demonstrate progress in this area, the national government would have taken a large step in establishing a more healthy pattern for telecommunications development throughout Russia. Allow service providers rather than regulatory agencies to define hardware and software standards to promote connectivity. The technological platform for the provision of telecommunications services in a competitive economy would depend on the interplay between customer needs and service provider capabilities. In the Russian context, the government has taken a very active role in dictating the kinds of technologies and infrastructure development projects to be undertaken by the private sector -- thereby breaking the already weak linkage that exists between customers and service providers. The government has carried out these policies in the name of advanced technology; trying to ensure that foreign companies use the most advanced technology, and contribute to the rebuilding of the public network, the government has created all sorts of hardware standards and software specifications that have greatly restricted, rather than advanced, the penetration of advanced telecommunications technologies. The government needs to stop concentrating on technological specifications and recognize that there are a range of appropriate technology that can be brought to bear in meeting the telecommunications needs of its citizens. In turn, for purposes o distance learning, public policy mandates to codify a particular form of application, a particular transmission protocol or hardware interface will be counterproductive. By letting service providers work together to define common interfaces, it is much more likely that a sustainable distributed network will be built to the specifications and needs of educational institutions throughout Russia. Enhance public awareness on telecommunications issues. The government also has a critical role to play in increasing the level of public education about telecommunications issues-- and that effort can be folded into the broader push to develop the market for distance learning applications in Russia. The existence of telecommunications networks is, in and of itself, a revolution for governance. The ability to educate and inform citizens should be at the top of the government's agenda. If an infrastructure to support distance learning and other educational applications can be put into place, the government can work with the educational institutions to develop a whole range of programs to educate people about not only new telecommunications and information technology, but also the civic evolution of the entire country. This ability to connect directly with the people through a personal, two-way dialogue about the future of the country can transform the political and social landscape of the country. Investment Strategy and the Sustainable Development of Distance Learning in Russia Clarifying the rules of the economic game in the telecommunications sector, though, is only a first step in creating the foundation for the development of the telecommunications sector in Russia. Improving the investment environment and proactively bringing investment into the telecommunications sector are two different things. Considering the low quality and penetration rates for telecommunications services in Russia, it is clear that investment in new technology will be critical. For Russia to achieve a 35 percent teledensity, Russia will need at least 34 million new telephone lines at a cost of approximately $82.6 billion. To date, Russia has concentrated mostly on the local generation of debt and equity financing through the privatization process. Foreign players have not been brought in to invest in and manage the wireline telecommunications infrastructure. Although some claim that the necessary investment for rebuilding the Russian telecommunications infrastructure can be generated from within, clear opportunities for reasonable investment returns are not well defined. If distance learning can be positioned as an area of critical investment need, and steps are taken to improve the investment environment, there is an opportunity to overcome this barrier through slow but certain progress. Ensuring the sustainability of investment requires both an economic calculation and a political decision. The economic calculation is one that is well understood by corporate and private investors; it is the political decision that is often misunderstood and wrongly perceived. Sustainability requires the alignment of certain key political and social interest groups -- such as the military and various educational institutions -- that support the ongoing activities of the private investor. Foreign companies looking to invest in Russia's long term growth will be able to define linkages with key groups through investment in distance learning and other applications that serve the needs of the educational community. In short, the choice to invest strategically in distance learning can be viewed by foreign investors as a strategic decision to link together various national interests to ensure broad-based appeal. If that appeal resonates deeply enough, it may be possible to bring out literally billions of dollars th have been tan overseas by local investors who are too uncertain about the "rules of the game" to invest these considerable resources in Russian-based business ventures. Russian institutions with strong telecommunications capabilities can be brought into productive alliances with the key content providers for a 21st Century distance education system. This can be facilitated by international organizations like the World Bank, which can help establish bridges between public and private sector institutions. Within the World Bank Group there are a number of different units which are already playing or could play this catalytic role. The World Bank's Russia Management and Financial Training Project, which operates through the National Training Foundation and three Regional Training Foundations provides for finance of distance learning by Russian training institutions working in the areas of finance, auditing, accounting, management development public finance, and tax administration as well as some pilot projects in training of journalist and use of television to reach mass audiences. A legal reform project provides for the use of mass media for increasing public understanding of the role of the legal system in a market economy. The Bank's Economic Development Institute (EDI) is moving to develop distance learning as a major focus of its training programs in Russia. The Bank's new infoDev Program, mandated by the Telecommunications and Informatics Division of the Finance and Private Sector Development Vice Presidency has received proposals to promote telecommunications reform and develop distance learning applications in basic medicine. The Bank's Electronic Media Center (EMC) has supported these initiatives and also worked with Russian television producers, Freedom Channel, and Russian as well as with international funding sources to promote better understanding of key policy issues like economic stabilization, privatization, and defense industry conversion. The International Finance Corporation (IFC) can provide equity investment as well as loans to critical enterprises, and the Multilateral Investment Guarantee Agency (MIGA) can provide political risk insurance to private investors and assist in the promotion of private investment. Other members of the United Nations family, in particular ITU and UNESCO, can also play helpful roles, as can a number of bilateral aid agencies and foundations. Conclusions The transformation of Russia from the bottom-up requires cultivating social values conducive to a strong and healthy political and economic system. Those values will need to be reflected in the telecommunications infrastructure that is constructed to serve Russia's citizens in the next century -- if not, the infrastructure will not meet the needs and interests of the broader community of Russia's citizens, and serve only the commercial interests of an isolated elite of Russian society. What is clear from our discussions is that distance learning does have the potential of acting as a catalyst to bring together various public and private sector interests, both from within Russia and from foreign countries. Those interests can be brought together to serve a single purpose: the construction of a unified, integrated and common distributed network for use by Russia's educational institutions so that applications like distance learning can be diffused throughout the country. With further effort on the part of government institutions and key private companies, that network can be populated with critical civic and educational information that will be of use to all of the country's stakeholders. In this case, the issue might not be to decide which comes first, the chicken or the egg. The decision is to simultaneously take care of the chicken that is still alive and breathing, while protecting the golden egg of Russia's future. With a common agenda to build the telecommunications infrastructure to meet the needs of all Russia's, both the chicken and the egg should do just fine. Information about the authors Mikhail Kazachkovis President of Freedom Channel and a Research Fellow at the Edward R. Murrow Center for International Communications, Fletcher School of Law and Diplomacy, Tufts University. In 1975 after a decade of research in theoretical physics for the Academy of Sciences of the USSR he was arrested by the KGB. Released in November 1990 as the Soviet Union's last dissident prisoner, in August 1991 he joined the Human Rights Program of the Harvard Law School where he co-authored his nation's first "how to" human rights manual. Freedom Channel is not-for-profit corporation for the past three years active in Russian television, survey research and consulting to government agencies. The last consultancy of Freedom Channel was advising the State Duma on setting up its Radio and Television Service which went on the air in January 1996. Peter Knight is the Chief of the Electronic Media Center of the World Bank. He has 20 years of experience in that institution, working in operations (Brazil), policy, external training, and now electronic media. He holds a Ph.D. in economics from Stanford University, and degrees in government (Dartmouth College) and politics, philosophy and economics (Oxford University). With long experience in Latin America, and more recently Africa and Asia, he began working with Soviet and then Russian economists and media experts in 1990 and has been actively involved in training of Russian economists, distance learning, electronic networking, and television production in that country in recent years. Brian Regli is an Assistant Vice President at HRN and a Research Fellow at the Edward R. Murrow Center for International Communications, Fletcher School of Law and Diplomacy, Tufts University. His recent consulting work includes extensive marketing research and public policy analysis for NYNEX, Telstra, and Ameritech. He holds a Ph.D. in International Affairs from the Fletcher School of Law and Diplomacy. His recently completed thesis, entitled Strategic Liberalization: Development Through Competition in Wireless Communications, focuses on the impact of new wireless technologies on the structure and organization of the telecommunications industry worldwide. |
