The Polynesian island nation of Tuvalu, formerly known as the Ellice Islands, consists of nine tiny coral atolls in the South Pacific, east of Fiji. It has a population of 10,838 and is a constitutional monarchy. Its only natural resources are fish and copra. It has no streams or rivers, and is dependent on Japanese-built desalination plants for drinking water. However, it has one other natural resource that you cannot touch, taste or smell.
In 1991, Tuvalu had the good fortune to be assigned the top-level Internet domain suffix .tv. It's not difficult to imagine the potential of those two letters, and right from the outset the Internet entrepreneurs were waving their chequebooks. In 1998, Canadian Jason Chapnik successfully signed a deal securing the rights to the .tv suffix for $50 million, to be paid over a 12-year period. The Tuvalu government also has a presence in the boardroom and a 20 per cent stake in the company.
Not surprisingly, a cash deal of this magnitude will have a major effect on the population. Plans for using the money include the wiring of the outer islands for electricity, staffing of hospitals and schools, and the upgrading of its vital airstrip.
The country has already received $18 million as part of the agreement, and this had the effect of increasing its gross domestic product by about 50 per cent. One of the first items on the agenda was an application to join the United Nations, and on September 5th, 2000, Tuvalu was formally inducted into the international body. During the past six years, only four other countries have applied and been admitted to the UN.
Tuvalu still remains part of the British Commonwealth, although there has been parliamentary discussion on the idea of declaring a republic.
Many miles away, in California, Chapnik's company DotTV is selling the domain suffix to TV stations and other media interests all over the world. Chapnik has the advantage that a TV is a TV in many languages, including Irish, which technically doesn't even have the letter `V' in its alphabet. Even in countries that use the Cyrillic alphabet, TV has become part of the lingua franca. This helps Internet companies that register in the .tv domain to build globally recognised brands, and strong branding is seen as essential for successful ecommerce.
The domain name market is booming, with over 40,000 domain names registered every day, and DotTV has grown faster than any other domain name registry in the world. Tuvalu's idea of using the country domain .tv was indeed clever, and it was fortunate for Chapnik that the country that owned it was sufficiently small and under-developed to make negotiations a possibility.
FOR the Tuvaluans, there does not seem to be any downside to the deal. They have their problems, such as coastal erosion caused by the use of sand for building materials, and these may be exacerbated by the influx of cash.
The big environmental issues for the island are the spread of the crown-of-thorns starfish and the rise in the sea level owing to greenhouse gas emissions. The low-lying atolls would be rapidly submerged if there was to be a continued rise in sea levels caused by melting of Antarctic ice. The highest point on any of the islands is just 5 metres above sea level.
A spin-off bonus from the widespread media coverage of the deal is that tour operators are now looking at the Tuvaluan atolls as potential tourist destinations. The Tuvaluan government plans to spend some of its .tv profits improving facilities for tourism, which it sees as a longer-term source of revenue for the islanders.
Fintan Gibney is an IT consultant with Irish software company SmartForce. He can be contacted at gibney@ireland.com