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National broadband plans in Latin America: expansion of internet access as a public policy

“While developing countries tend to focus on the impulse of trunk lines to update old networks that are still being commercialized by incumbent operators, and in policies promoting access to the still disconnected population (the digital divide), the more developed nations have tended to focus on improving access, along with ‘pushing fiber optics’ closer to end users.”

* Gustavo Fontanals/Regional, June 2015


One particular feature has spread around the globe in the last ten years in the area of telecommunications: the implementation of national broadband plans by the respective States. This refers to a set of heterogeneous public policies that are combined in different ways depending on each case, but coincide in their fundamental objective: to promote the expansion of network coverage in the national territory and the use of Internet by the population.

The global expansion of plans for broadband integration marked a noticeable change with respect to the consensus of the 90s and early 2000s, focusing on the privatization policies of national operators and market liberalization, which limited state involvement to last resort control. As discussed in this article, which analyzes the evolution of telecommunications polities over time, changes in orientation and international distribution have been commonplace: the existing consensus is fracturing, and a new policy has expanded to account for such shortcomings and new requirements. In this case, a combination of both these aspects is present.

On the one hand, recognition of broadband as a new universal telecommunications platform that allows for the provision of a multiplicity of digital services, from entertainment and information to education and health, or business or government practices. Access to broadband has established itself as a right, encouraged by multinational organizations such as the UN and OAS and endorsed by a growing number of countries: basically it is viewed as an essential means for the exercise of fundamental rights such as access to information or freedom of opinion and expression, among others. At the same time, numerous studies have indicated the positive impact that increased broadband penetration has on both productivity and GDP.

Furthermore, an assessment of the need for more active state intervention has occurred as a way of responding to the shortcomings of the previous model, so as to promote or upgrade networks in order to ensure coverage in remote or disadvantaged areas. However, the problems aren’t the same in each particular location: while developing countries tend to focus on the impulse of trunk lines to update old networks that are still being commercialized by incumbent operators, and in policies promoting access to the still disconnected population (the digital divide), the more developed nations have tended to focus on improving access, along with ‘pushing fiber optics’ closer to end users.

Both factors have been effectively operated in the region over the last five years, encouraged by the imitation effect of the success in developed countries (the example of South Korea was key in triggering global dissemination). And this was complemented by factors specific to the regional economic and political context: the shift towards policies for greater state intervention, and the relative economic boom driven by improved terms of trade. This was something that occurred in many but not all countries in the Latin American region, although in general it is a phenomenon that has been restrained in recent times, thus affecting on-going programs.

Policies that are usually included in broadband plans can be divided into two areas: promotion of access (supply or penetration) aimed at territorial expansion of updated networks; and promoting the use (application or appropriation), aimed at involving society in the available benefits.

The first area includes various policies to expand coverage, such as development of a network backbone or the connection of districts which, due to their location, density or economic capacity have stimulated little interest among existing operators. On the one hand, a response has been sought to a range of limitations of high-capacity networks (complementary developments), but also to the problems of competence in the access networks outside of major urban centers (duplication). Cases range from the creation or reactivation of state enterprises (Argentina, Brazil) in charge of the construction and operation, and generally through wholesale schemes with operators (large or small, private or cooperative), which also have the possibility of providing last-resort services; and also public-private projects (Colombia, Mexico), where the state grants or is associated with consortia that develop and/or operate the network under certain conditions for a specific period (with the subsequent reinstatement or return of property).

In turn, grants, loans or technical agreements may be included with medium and small local operators, particularly in disadvantaged areas, and who are also responsible for the final efforts. More traditional funding schemes for Universal Services (Chile) have also been registered, in which the State supports the private operator to expand the network to certain areas. The case of Mexico also stands out, in which it was decided to supplement the network backbone with a wholesale mobile network, in a private-public project opened to tender.

However, these policies are not limited to the promotion of new lines, and may include regulatory measures to promote competition and reduce the dominance of incumbent operators: obligations in terms of sharing and the disaggregation of networks, the awarding of radio spectrums with coverage obligations, and tariff regulations, etc.

With respect to the promotion of demand, these are policies oriented towards boosting digital literacy and training, as well as tele-education, tele-health and tele-government practices. Usually, goals are set for 100% coverage of state schools, hospitals and buildings, to which is added the development of digital access telecenters in selected locations. In some cases such initiatives are supplemented by the provision or subsidy of terminals (Plan Ceibal in Uruguay and Connect Equality in Argentina, as well as tax exemptions and incentives in Colombia and Brazil). The promotion of local content, in national languages or dialects, so as to encourage pluralistic access is also contemplated. And then there is the tendency of businesses to adopt electronic practices, particularly in terms of SMEs and regional markets.

Finally, some comments on the development of plans, some of which have been running for the last five years. In general, flaws have been detected at the initial programming stage, including the absence of timetables or scheduling delays, along with a lack of accurate information on the progress made, all of which is necessary in order to control or review said plans. In general, network backbones have yet to enter into operation, except in the cases of some sections. The absence or low definition of broadband speeds has also repeatedly occurred, which raises the risk of connections that are not particularly suitable for advanced applications. Not all countries provide delivery or promotion of terminals, or incentives for local production of equipment to encourage supply, or services or contents that promote demand. Weaknesses have also been recorded in terms of digital literacy, which certainly requires significant resources: this is particularly concerning as the lack of such capacity plays a key role in the persisting digital divide.

Operators recognize the importance of an active role played by the State, but insist on the need to promote private-public dialogue at all levels, and stress the importance of their networks, technological capabilities and investments for the development of the same. To this is added the concern about the regulation of state enterprises and wholesale network consortiums, which are generally enabled to provide final services (no strict separation policies have been included). This is interspersed with the absence of mechanisms for the long-term financing of such operators, whose profitability is still to be verified. It should also be noted that in general no linkages have been established with existing funds for Universal Services.

Finally, it would be appropriate to work on the development of network access points (NAP) and local servers, which enable a reduction of costs along with the optimization of traffic. This should be accompanied by policy coordination at regional level. At the beginning  of 2015, an agreement was signed between the countries of UNASUR for the creation of a regional fiber optic ring, which represented a new step in expanding connectivity plans in Latin America.

* Political scientist and telecommunications specialist; researcher at the University of Buenos Aires, @Phillynewrocker


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