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Old Apr 27th, 2003, 11:52 PM       
Something surprising on the issue of the future Iraqi economy.

Quite a bit this article alludes to is actually a little scary, assuming of course what I'm reading between the lines isn't just more fear mongering from yours truly.

Could Iraq become the Silicon Crescent?
Thursday, April 24, 2003 Posted: 9:46 AM EDT (1346 GMT)

(AP) -- Although Iraq first needs basics like electricity and a government, it is already shaping up as a rare opportunity for technology companies. It is saddled with a tattered phone system, weak Internet access and virtually none of the wireless wonders sweeping other countries.

Even if Iraq never becomes the Silicon Crescent, big money is at stake. Rebuilding the country's telecommunications networks and constructing new facilities from scratch would cost billions.

U.S. officials have not explained how telecom contracts will be awarded, whether deals signed by Saddam Hussein's regime will be honored, or whether U.S. and British companies will be preferred. The U.S. Agency for International Development, which is doling out several Iraq reconstruction projects, will not oversee telecom deals, spokesman Alfonso Aguilar said.

U.S. and international companies that want to take part say the biggest beneficiaries would be the Iraqi people, whose connections to the outside world were stunted by Saddam's dictatorship and ravaged by war.

'Land of opportunity'
"Iraq is now the land of opportunity," said Loay Abu-Osbeh, who oversees the Baghdad office for Abu-Ghazeleh Intellectual Property, a Jordan-based technology consulting firm.

"People who were outside Iraq ... have come back to Iraq to make money in Iraq, and I can see it happening. This is a business everybody is interested in, doing Internet, Internet cafes, connecting to big servers (elsewhere) in the world."

While Saddam's regime had a now-shuttered Web site, Uruklink, Iraqis had little Internet access other than in government centers, which offered slow connections routed through "proxy servers" that tried to filter out content the regime didn't like.

Voice communications haven't been much better. Satellite phones used by journalists and aid workers are too expensive for regular Iraqis, and the country has virtually no cellular phone coverage other than in the Kurdish north.

To compensate, many Iraqis tinkered with their home cordless phones prior to the war to extend their range to a mile or two, according to Pyramid Research analyst Joseph Braude, author of "The New Iraq."

Saddam's regime, which monitored international calls, couldn't mask the decrepit state of the phone system. It was bombed in the first Gulf War and kept in disrepair largely because of trade sanctions. In recent years, phone use had to be rationed.

In 1990, Iraq had 5.3 phone lines for every 100 people, but by 1998 there were only 3 per 100, according to the International Telecommunications Union. Neighboring Iran has 16; Syria has 11. The United States has 67.

$1 billion phone repair bill
Even before the recent war, the cost of rehabilitating Iraq's phone system was estimated at $1 billion over seven to 10 years.

That project will now include repairing bombed Baghdad phone exchanges, although Marines say 95 percent of the networks are intact -- they just lack electricity. Some neighborhoods' exchanges are working again, but only for local calls.

All this could amount to a huge feast for Western telecom and technology companies that have been starving since the 2000 dot-com crash.

Saddam did most of Iraq's recent telecom business with Turkey and France; much of the phone network was built by France's Alcatel in the 1980s.

Will France's antiwar position will hinder its companies in getting reconstruction projects?

An Alcatel spokesman who spoke on condition of anonymity said the company will seek telecom business in Iraq, though he acknowledged "we don't know what kind of chance we will have."

Alcatel's U.S. rival Lucent Technologies Inc. is "prepared to offer whatever assistance we can to help the U.S. government rebuild the networks there," spokesman Bill Price said.

Similarly, AT&T Corp., which replaced phone-switching systems in Kuwait after the 1991 war, is eager to get tapped again for Iraq, spokesman Jim McGann said.

The issue of wireless communications arose early in Operation Iraqi Freedom when Rep. Darrell Issa, R-California, said postwar Iraq should have a cellular network on the CDMA standard developed by Qualcomm Inc. -- based in Issa's district -- rather than the European GSM standard used in most of the Middle East.

Either way, U.S. companies can benefit. For example, Motorola Inc., which makes GSM and CDMA equipment, will seek work in Iraq, spokesman Norman Sandler said.

Some technology aficionados say whatever communications work is done in Iraq should include hot new wireless technologies and equipment that routes long-distance calls inexpensively over the Internet, so Iraq can leapfrog other developing countries.

'Geeks Without Borders'
If paying for such projects proves difficult, there's a coalition of the willing: the London-based Committee for Information Technology Reconstruction of Iraq.

The nonprofit's founder, Ben Fitzgerald-O'Connor, suggests auctioning off Internet addresses with the ".iq" suffix that was assigned to Iraq but is now in limbo.

Assuming enough people -- geniuses, presumably -- would want "iq" in their e-mail or Web addresses, Fitzgerald-O'Connor estimates $10 million could be raised for Iraqi Internet projects.

"It would be a little thing the (technology) community could do to help," he said. "Something like 'Geeks Without Borders."'
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