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Broadband in Brazil: A multipronged public sector approach to digital inclusion. Washington, D.C: infoDev / World Bank. Available at http://www.broadband-toolkit.org. 3 Table of Contents Executive Summary………………………………………………………………………………. 7 1. Demographic, Political and Economic Context………………………………………………. 9 2. Broadband Market Dynamics…………………………………………………………………. 11 2.1 National ICT sector management – policy and regulation…………………………………… 11 2.1.1 Broadband licensing…………………………………………………………………. 12 2.1.2 Radio spectrum………………………………………………………………………. 13 2.1.3 Internet governance………………………………………………………………… 13 2.2 The broadband ecosystem………………………………………………………………… 13 2.2.1 Backbone networks…………………………………………………………………… 13 2.2.2 Alternative/complementary infrastructure operators………………………………… 14 2.2.3 Interconnection……………………………………………………………………… 15 2.2.4 Broadband providers………………………………………………………………… 15 2.2.5 Access devices………………………………………………………………………… 18 2.2.6 Public access facilities………………………………………………………………… 18 2.2.7 Content and applications……………………………………………………………… 19 2.3 Patterns of broadband utilization…………………………………………………………… 19 3. The PNBL………………………………………………………………………………………. 21 3.1 Price and performance targets………………………………………………………………. 22 3.2 Coverage targets…………………………………………………………………………… 23 3.3 Backhaul/backbone network development………………………………………………… 23 3.4 Promoting increased broadband competition……………………………………………… 23 3.5 Use of satellite……………………………………………………………………………… 24 3.6 Extension of mobile services to remote areas……………………………………………… 24 3.7 Universal service…………………………………………………………………………… 24 3.8 Content and applications…………………………………………………………………… 25 3.9 Radio spectrum liberation…………………………………………………………………… 25 3.10 Subscription/cable TV broadcasting……………………………………………………… 25 3.11 Fiscal incentives and subsidies…………………………………………………………… 25 3.12 State and municipal efforts………………………………………………………………… 26 4. Lessons Learned………………………………………………………………………………. 28 5. Annexes…………………………………………………………………………………………. 31 5.1 A timeline of events related to the PNBL…………………………………………………. 31 5.2 Relevant links……………………………………………………………………………… 32 5.3 Glossary……………………………………………………………………………………. 34 4 List of Figures Figure 1-1: Map of Brazil…………………………………………………………………………… 10 Figure 2-1: CGI.br structure………………………………………………………………………… 12 Figure 2-2: Brazil’s submarine cable systems………………………………………………………… 13 Figure 2-3: OI/Tele Norte Leste backbone fibre network…………………………………………. 14 Figure 2-4: Petrobras and Electronet fibre networks………………………………………………… 15 Figure 2-5: Growth in average traffic exchanged on Brazil’s IXPs…………………………………. 16 Figure 2-6: Mobile coverage in Brazil………………………………………………………………. 17 List of Tables Table 1-1: General statistics………………………………………………………………………… 9 Table 2-1: Broadband users by type of technology, 1000s, February 2011…………………………. 17 Table 2-2: Fixed broadband subscribers by speed of access, 1000s, February 2011………………… 17 Table 2-3: Key features of the broadband market in Brazil…………………………………………. 20 5 Acknowledgments Mike Jensen drafted this report with inputs from Michael Stanton (RNP) and Christian O'Flaherty (ISOC Latin America), and significant contributions by Michael Minges, who directed the case studies for the Broadband Strategies Toolkit. The supervision of Tim Kelly (infoDev) and Carlo Rossotto (TWICT), for their direction on the overall project, is also acknowledged, as is Samhir Vasdev for editing and preparing the document for publication. This case study is one of an initial series of seven that will contribute to the Broadband Strategies Toolkit, an online resource for policy-makers and regulators, especially in developing countries (see www.broadband-toolkit.org). The Toolkit and its case studies are generously funded by the Korean Trust Fund (KTF) on Information and Communications for Development (IC4D). The KTF is a partnership between the government of the Republic of Korea and the World Bank Group whose purpose is to advance the ICT4D agenda to contribute to growth and reduce poverty in developing countries. The KTF, as well as Philippe Dongier, Sector Manager (TWICT) and Valerie D‘Costa, Program Manager (infoDev), are owed the author‘s gratitude for their support and guidance on this project. 6 Executive Summary Although classed as an emerging economy, Brazil areas, most particularly in the less wealthy north is among the top ten countries worldwide when and west part of the country. For example in the ranked by total number of broadband users. At North-East region, fixed broadband penetration the end of 2010 Brazil was in 9th position, with languishes at 1.46%, while it is over 11% in the about 15m fixed broadband subscribers, as well more industrialised Sao Paulo region in the south. as 20m mobile broadband (3G) subscribers. This is not particularly surprising considering that The pattern of uneven access also repeats itself at Brazil is the world's fifth most populous nation, the local level. Most cities have wealthy areas but due to the high levels of wealth disparity and with high levels of domestic broadband access, the relatively large numbers of poor and rural while close by, in the informal townships inhabitants scattered across its vast terrain, (favelas), which house most of the country's broadband penetration in Brazil is lower than in poor, there is almost no fixed broadband and other countries of equivalent income levels residents mostly depend on cybercafes or (ranked by the World Bank as 57th in the world relatively slow and more expensive 3G by GDP/capita - US$10,710 in 2010). connections. Regionally, Brazil is slightly above the Latin In the last 10 years, the federal government has American average in terms of penetration, but had little success in disbursing its Universal behind Chile, Argentina, and Uruguay. Speed of Service Funds to address the digital divide, access follows a similar pattern – Brazil is better although a variety of state and municipal level than the regional average, but below US or initiatives have improved the availability of public European levels. Likewise, Brazil has relatively access facilities to some extent. good international fibre connectivity, although it is not as well connected as some of its Limited fixed infrastructure: The private sector neighbours. Similarly, prices for has invested about USD80bn in telecommunication and broadband access are telecommunications over the last 12 years, but lower than other countries in the region yet still Brazil's vast size and low population density in relatively high compared to North America and the rural areas has resulted in limited national Europe, especially outside the major cities. pervasion of telecommunication infrastructure. Phones, computer and telecommunication This presents one of the biggest problems in equipment are also significantly higher in cost, broadening access to the Internet. The relatively partly due to import duties on IT equipment, low level of fixed infrastructure, both in the long- further reducing affordability of access among haul, and in the local loop for DSL-based the lower-income groups. broadband services, is one of the key constraints. However the lack of middle-mile infrastructure Large variation in access levels: As reflected necessary to ensure all 5500+ municipalities are by the wide variation in income levels within the connected to the national backbones probably country, broadband access is very uneven. At one represents the biggest challenge to ensuring end of the spectrum there is a high density of equitable broadband access across the country. access in the industrialised urban areas, mostly in the south east of the country. In these areas, Competition in the fixed-line sector is low and Brazil has recorded some of the world's highest fixed line penetration has actually been falling levels of Internet use, and in particular, Brazilians due to mobile subscriber substitution. With the have been early users of social networking relatively high level of penetration and services such as Orkut, and now Facebook. At competition between mobile networks, 3G the other end of the spectrum, there are the vast services are expanding rapidly to fill the demand hinterlands of unconnected rural and remote for broadband, especially among lower income 7 households. As a result wireless access is likely to The initial focus of the PNBL has been to be the main growth area for broadband in Brazil, address the deficiencies in the existing especially now that some of the constraints in telecommunication operator backbones by access to radio spectrum have recently been bringing on the oil and electricity network addressed. operators’ fibre networks to help fill in the gaps. Local access is now also being addressed through National broadband initiative launched: In an a variety of other measures, such as tax effort to help to improve coverage and reduce exemptions, reducing broadband license fees, the cost of broadband access, the government accelerating efforts to make additional radio has begun a major broadband infrastructure spectrum available, and other incentives to development initiative which has set ambitious encourage the provision of broadband in rural targets to triple broadband uptake by 2014. The areas. In May this year (2011), Telebras awarded largest ICT infrastructure project ever carried out three operators contracts worth USD43mn to in Brazil, called the National Broadband Plan provide transit, wholesale and broadband services (PNBL1), it aims to ensure that broadband access in some states. is available to low-income households, especially in areas that have so far been poorly served. The Internet sector in Brazil is also supported by a large number of industry, government and civil In May 2010, when the project was officially society groups, both monitoring and promoting announced, it was initially allocated up to R$1bn access to ICTs. As a result the level of up-to-date (US$600m) a year until 2014 to ensure broadband information on broadband utilisation is high, and reaches the 4000 cities and towns without the debate over strategy is widespread. broadband services, so that at least 40 million homes (or 68% of the population) have access to The resurrection of the old public monopoly speeds equal to or greater than 1Mbps, for about operator Telebras to compete with the private USD20 per month. sector has not been without controversy, and the extent to which the poorest of the poor get The new government, under President Dilma access to broadband remains to be seen. But Rousseff, has re-affirmed its commitment to the steadily rising economic prosperity for the less PNBL which was originally developed under the wealthy, along with the flurry of ICT investment previous President Lula da Silva's administration. made to prepare for the FIFA World Cup in To implement the programme, the dormant 2014 and the Olympics in 2016, suggests there former state-owned monopoly operator, are much improved prospects wider adoption of Telecomunicacoes Brasileiras (Telebras), has broadband in Brazil. The strategies adopted and been resurrected and given the task, working lessons learned from both public and private closely with the national regulator, Anatel, and initiatives will be valuable for other developing the Ministry of Communications which has also countries planning to promote better access to set up a special secretariat to co-ordinate the broadband, and are likely to have special PNBL in concert with the government's other relevance for other large emerging economies, in digital inclusion programmes. particular the BRICS countries - Russia, India, China and South Africa. 1Plano Nacional de Banda Larga http://www.mc.gov.br/plano- nacional-para-banda-larga or http://www4.planalto.gov.br/brasilconectado/pnbl 8 1. Demographic, Political and Economic Context Brazil is the fifth most populated and fifth largest and culture. Emerging from decades of military country in the world, with over 190 million rule in 1985, Brazil has since been governed as a people and an area of about 8.5 million sq km. democratic republic. The president is elected to a Urbanisation levels are relatively high compared four-year term and each state has a governor and to many other emerging economies, and a large each municipality has a mayor, both being elected majority (84%) live in built-up environments, directly. Similar to other federal republics, the mostly along the coast. The five largest cities are individual states have a significant degree of São Paulo, Rio de Janeiro, Salvador, Belo financial and policy-making autonomy, resulting Horizonte, and the federal capital, Brasilia. There in some significant variations public policy are 44 cities of over 500 000 people, and 5,563 support for broadband access. municipalities. With almost 30 million people in the rural areas outside municipal services, Brazilians are diverse in origin, with just under provision of affordable broadband to this group half the population being of European descent, which have the lowest average income levels, while more than 40% are of mixed African and presents a particularly severe problem. European ancestry. There are an estimated 350,000 to 550,000 indigenous peoples, mainly Constitutionally, Brazil is a federation of 26 states found in the rain forests of the Amazon River (plus the Federal District - Brasilia), which can be basin. Portuguese is the official language and is divided into five regions - the North, North-East, nearly universal, while English is widely taught as South, South-East, and Centre-West. Each a second language. None of the other countries region has its own geography, economic activity, in the region speak Portuguese, and the relative Unit Date Area 8,514,876 Sq. Km. n/a Population Density / sq Kms 22 People 2010 Population 190,755,799 People 2010 Annual Population Growth 1 % 2010 Households 67,200,000 2010 Rural Population 29,830,007 People 2010 Urban Population Proportion 84 % 2010 Population of Top 200 Cities 72,409,158 People 2010 Number of cities > 500 000 people 44 2010 Municipal Districts 5,565 2010 GDP (trillion) 2.1 USD 2010 GDP/ capita PPP 11,239 USD 2010 GDP Growth 7.50 % 2010 Unemployment 6.00 % 08/2011 Exchange rate R1 0.6 USD 09/2011 Table 1-1: General statistics (Source: IBGE 2010 Population Census http://www.censo21.ibge.gov.br) 9 global demand for commodities and the country’s relatively advanced industrial export sector. As a result record numbers of poor have entered middle class, unemployment is at an all- time low (6%), and population growth is down to 1% annually. Official statistics divide Brazilian society into 5 classes, A-E, with E being the poorest. Class C, often called ‘the new middle class’ by the media, includes people with an individual monthly income of US$188-$815 (R$300 to $1,300). The growth of this group is one of the most important trends of the last decade, now representing just over half of the population, and expected to reach 60% by 2014. Part of the increasingly influential BRICS2 group of large emerging nations, Brazil is now a net Figure 1-1: Map of Brazil (Source: RCRWireless.com) creditor to the US and has over US$300bn in currency reserves. Since early 2009 the value of size of the diaspora is very small, resulting in the Brazilian currency, the Real (R), has been minimal demand for access to Internet content steadily appreciating against the US dollar, rising and applications in neighbouring countries or from about 0.4 to 0.65 USD in August 2011, and outside the region, and vice-versa, except for the by many benchmarks is amongst the most few other Portuguese speaking countries (Angola, overvalued currencies in the world. Although its Cap Verde, Macau, Mozambique, Portugal and value slid by more than 10% in September 2011, Sao Tome e Principe). the Real is still seen as overvalued, and as a result, the currency's strength needs to be taken into With the progressive macro-economic, social account when making broadband cost support and education policies of the centre-left comparisons with other countries. administrations of the last decade, Brazil's economy has grown steadily, bolstered by the 2 Brazil, Russia, India, China and South Africa 10 2. Broadband Market Dynamics Brazil's broadband market is serviced by a wide range the many fragmented directives that have built up of access technologies deployed by the network over the years to respond to the evolution of the operators. These range from fibre to the home, market. The telecommunications legal regime is copper cable-based DSL, broadband over power lines defined at a high level in the General and cable-TV, to a variety of wireless and satellite- Telecommunications Law4 (LGT) of 1997 which based systems, but mainly 2.5/3G, MMDS and WiFi. provides the main guidelines on telecommunication services, universal service goals and the functions of Similarly there are substantial variations in the types Anatel. The licensing regime includes provisions that of broadband providers (fixed, mobile and TV if an operator does not provide the services it has network operators, as well as domestic and agreed to in its license, the State can take over its internationally based companies), and many do not operations, including its existing infrastructure. The compete directly with each other due to geographic LGT is supported by a large number of more specific market segmentation of licensing at the four regulations, the major ones of which are outlined government levels – national, regional, state, and most below. recently, municipal. In 1998 the General Grant Plan5 (PGO), with a 10- In addition, the sector is going through major year scope, identified which telecommunication transformation, with the merger of a number of the services must be provided as a public service, with large fixed and mobile operators, and the recent consequent price controls, quality of service and opening up of the subscription/cable TV market to universal service obligations. At the time PGO only foreign owned telecom operators. Mobile operator included voice services, and this did not change in the Claro, and fixed operator Embratel, are both now 2008 updated PGO, however MiniCom has since majority owned by the Mexican businessman Carlos proposed that it be modified to include broadband Slim, and Telefonica of Spain controls the country’s services. The 1998 PGO also established the basis for leading mobile carrier by subscribers, Vivo privatisation of the state owned monopoly operator Participacoes, as well as Telesp, the incumbent Telebras6, and divided Brazil geographically into four operator in Sao Paulo state. major licensing regions, limiting cross ownership and the number of players in each of the regions. This web of technologies, multiple licensing regimes, types of service providers, geographic separation and In addition, the 1998 PGO also established the basis supplier consolidation has created a highly complex for a universal service fund known as the Fund for broadband market compared with most other the Universalisation of Telecommunication Services countries. (FUST). An additional fund was also established at the same time, aimed at supporting innovation and 2.1 National ICT sector management - capacity building to make the Brazilian telecom sector policy and regulation more competitive, called the Fund for Telecommunications Technological Development The main ICT sector policies are determined at a (FUNTTEL). There is a third fund, the national level by the Ministry of Communication Telecommunication Inspection Fund (FISTEL), to (known as MiniCom) and regulated by Anatel3, the cover the cost of managing the telecom sector. national telecommunication agency. Anatel is also Revenues for the three funds are gathered from the responsible for regulating satellite capacity provision operators licensed to provide public and administering radio frequency channels for use by telecommunication services (i.e not ISPs currently, both telecommunications service providers and broadcasting companies. 4 Lei Geral de Telecomunicações http://www.planalto.gov.br/ccivil_03/leis/l9472.htm Brazilian telecommunications services do not have a 5 Plano Geral de Outorgas unified legislation, and policy is implemented through http://www.planalto.gov.br/ccivil_03/_Ato2007- 2010/2008/Decreto/D6654.htm 6 Of interest is that all telecom services were in private hands until 3 Agência Nacional de Telecomunicações 1972, when they were nationalised by the military government 11 Figure 2-1: CGI.br structure (Source: http://www.cgi.br) although this would likely change if broadband goals for improving broadband access and becomes defined as a public service under the PGO). establishing mobile virtual network operators (MVNOs). The 1998 PGO restriction which Universal service objectives (USOs) and obligations precluded the incumbents from operating in more are defined in more detail in Anatel's General Plan of than one of the authorized regions was also ended at Universalization Goals7 (PGMU). The PGMU has this time. been updated a number of times, and in September 2010 the PGMU III was adopted, and is expected to In August 2009 the Steering Committee for Digital cost participating service providers R1.7 billion for Inclusion Programmes9 (CGPID) was established, the network infrastructure and maintenance costs which laid the groundwork for the National between 2011 and 2015. While not directly focussed Broadband Plan (PNBL), which was subsequently on broadband development, the infrastructure that announced in May 2010. The PNBL is described in will be required will naturally be used to support more detail in section 5. broadband services. 2.1.1 Broadband licensing In 2008 Anatel issued the General Update Plan of Brazilian Telecommunications8 (PGR) which defined Anatel requires a license for all entities that provide the 10-year strategic vision for the sector and included broadband access, with the most prevalent licenses being 3G mobile, cable TV and the Multimedia Communication Services10 (SCM). The latter is the 7 Plano Geral de Metas para a Universalização http://www.planalto.gov.br/ccivil_03/_Ato2011- most common public ISP license, allowing service 2014/2011/Decreto/D7512.htm delivery using wireless technologies, and more 8 Plano Geral de Atualização da Regulamentação das Telecomunicações http://sistemas.anatel.gov.br/SACP/Contribuicoes/TextoConsult 9 Comitê Gestor do Programa de Inclusão Digital a.asp?CodProcesso=C1169&Tipo=1&Opcao= 10 Serviço de Comunicação Multimídia 12 recently cable technologies, following Anatel's Steering Committee14 (CGI.br) which also monitors sanction of broadband over power lines (BPL) in the uptake of Internet services and helps guide the 2009. development of the Internet in the country. As shown below, CGI.br is structured as a multi-stakeholder In addition, the Limited Private Service11 (SLP) group comprising an equal mix of government and permit is available and mainly used by municipalities civil society representatives appointed by Ministerial to provide free access to relevant public information decree. services (such as for libraries and e-government applications in public spaces). The Private Network 2.2 The broadband ecosystem Service12 (SRP) permit is similar, but for corporate entities. The SCM license currently costs R9000 2.2.1 Backbone networks annually (but is being revised – see below), while both the SLP and SRP permits cost R400 per year. With Oi/Telemar's purchase of Brazil Telecom in 2008, the group now operates the largest fibre Voice over IP (VoIP) services are permitted, and network in the country, as well as one of the main unlicensed in Brazil, as they do not qualify as a submarine cable networks linking the country to the telecommunications service - rather they are seen as global backbones. The terrestrial network is about value added services that are supported by the 138,000 kilometres of long distance fibre, 30,400 underlying telecommunication network. kilometres of metropolitan fibre and the 22,000 kilometre Globenet submarine cable network which 2.1.2 Radio spectrum links Brazil to Venezuela, Bermuda and the USA. As shown in the map below, an indication of the SLP and SRP licensees may use the unlicensed Wifi challenges presented by the vast size of the country, spectrum in the 2.4 and 5.8GHz bands. SCM combined with the low income and population levels licensees may also use these bands, but they can also operate in the 2.5GHz band using MMDS type services, which are often used for subscription/cable TV, or sometimes WiMax. Spectrum licenses are required for all frequencies in cities larger than 500 000 people, including WiFi 2.4 and 5GHz bands. In towns smaller than 500 000 people, licenses for these bands are not required. Spectrum licenses are required for Wimax (available in the 2.5, 3.5 and 10.5GHz wavebands) and for 3G in the 800 and 900MHz bands. The auctioning of the 1.9/2.1 GHz band with mandatory sharing of infrastructure, took place in December 2010, despite some operator protests against the inclusion of Nextel, a new fifth player (the band was only to be available to operators with a mobile voice license). The mobile operators have a total of about 340MHz of spectrum allocated, with the maximum amount available per operator being 85MHz. 2.1.3 Internet governance Management of key Internet resources, such as domain names, the CERT13 and Internet exchange points (IXPs), is carried out by the Brazil Internet Figure 2-2: Brazil’s submarine cable systems (Source: http://www.cablemap.info) 11 Serviço Limitado Privada 12 Serviço de Rede Privado 13 Computer Emergency Response Team 14 Comitê Gestor da Internet no Brasil 13 in the northern region, is that capital of Amazonas changed its name from Infovias in 2010, offers the was only connected to the fibre backbone this year, largest optical fibre network in the state of Minas and it was more cost-effective to do this via Gerais. Venezuela's network. Internationally, a number of other submarine cables While not even close to the same scale as Oi's connect Brazil to the region and to North America network, the incumbent long distance operator and West Africa (Sam-1, SAC, Americas-I, Americas- Embratel's network is also among the largest in the II and Atlantis-2). There are also plans for a large country, running from the extreme south to Rio (12Tbps) cable called SAex to connect Brazil with Grande do Sul in the north, totalling about 26,000 Angola, which will also give it an alternative route to kilometres of optic fibre. Europe and Asia via the west African coastal cable systems. Aside from Telebras' recently established national network of about 31,000 kilometres combining the 2.2.2 Alternative/complementary infrastructure infrastructure of the electricity and fuel distribution operators operators (see Section 5), the other major backbones are operated by AES/AES Electropaulo Telecom, The operators and owners of overhead electricity GVT, Geodex and CEMIG Telecom. AES/AES pylons and poles, ducts and rights of way for Electropaulo Telecom has a network of about 4,700 highways and railways are a major potential resource kilometres. GVT (owned by Vivendi) has about for backbone fibre operators, but are well known for 25,000 km of optical fibre, while Geodex (owned by charging high fees for use of these resources for UBS, Deutsche Bank and Meridiana Interprises) has a telecommunication cabling in Brazil. It is not network of 11,000 km. CEMIGTelecom, which uncommon to find a charge for overhead poles as Figure 2-3: OI/Tele Norte Leste backbone fibre network (Source: http://www.globenet.net/PDF /Network-Map.pdf) 14 Figure 2-4: Petrobras and Electronet fibre networks (Sources: http://www.wirelessbrasil.org/bloco/2011/maio/mai_25a.html and http://www.wirelessbrasil.org/wirelessbr/secoes/telebras_eletronet/eletronet_01.jpg) high as R10 per month per pole, compared to R1 in outskirts of large cities. In the least well- the USA. served area, northern Brazil, the Eletronorte network is now expanding considerably The current situation also favours the incumbent because of plans to distribute hydroelectric operators, which negotiated long-term contracts energy to many cities due to the construction decades ago, and there may not be physical space of new hydroelectric schemes in Amazonia. available for new entrants, or if there is, prices are now much higher for the much more valuable  CEMIGTelecom operates a carrier-to-carrier resource that these rights of way have become. model using the infrastructure of its parent company, electrical energy provider CEMIG in Minas Gerais. Considering that much of the new investment in backbone infrastructure is going into the more remote  Petrobras has an extensive fuel distribution and less population-dense areas, where returns are network across the country lower, the high costs of access to alternative infrastructure is a significant constraint to more rapid 2.2.3 Interconnection deployment of broadband to the peripheral areas. There is a well-developed Internet traffic exchange There are also a variety of large electrical energy infrastructure in Brazil, with 16 exchange points15 generation and transmission companies operating at (IXPs) in different cities around the country. These either the federal or state level that sell improve performance for customers and applications telecommunication services directly, usually via a located on the networks of different providers and subsidiary. The largest of these are: save on transit fees for broadband providers by reducing the amount of local data that transits  Eletronet, a joint venture between the externally. The IXP model in Brazil is independent parastatal Eletrobrás and AES. The non-commercial, with NIC.br providing financial and Eletrobrás group has subsidiaries in different capacity building support for establishing IXPs where provinces - Furnas, Chesf, Eletronorte and needed. Eletrosul, with a total of 16,000 kilometres of optical fibre drawn. The network runs through 18 states, but only reaches the 15 Ponto de Troca de Trafego (PTT) 15 The first IXP in the northern region will be Embratel, and Vivendi's GVT, have gained an inaugurated this year and their deployment in a increasing share of the market with 18% and 5% number of major cities in other states is also respectively. underway. Although there are over 2,500 fixed broadband As to be expected, the largest IXP is in Sao Paulo city providers in Brazil, the five largest hold about 95% of with 185 members exchanging about 50 Gbps of the market. These are mainly the incumbent voice traffic at peak times, with the remaining IXPs operators, and according to the government's exchanging a total of about 10 Gbps of traffic at peak Institute for Applied Economic Research (IPEA), in times. June 2011 Oi was the largest broadband provider, with about 36% of the broadband market, followed 2.2.4 Broadband providers by NET Servicos (Embratel) with 26%, Telefónica Brazil with 24%, and GVT with 8%. 2.2.4.1 Fixed broadband Until the arrival of Telebras (see below) there has The current extent and future growth of fixed line been little structural wholesale/retail separation in the broadband services is limited by the stagnating market market, and the smaller ISPs largely resell capacity for fixed voice services, although this is being from (and compete with) the larger telecom increasingly augmented by other fixed technologies, in operators. particular deployments of subscription/cable-TV services, spread spectrum/Wifi, fibre to the home The principal operators in Brazil's cable/subscription (FTTH) and broadband over power lines (BPL). TV market are Net Servicos, Sky Brasil, Embratel, Telesp, and Oi TV. Net Servicos is the largest multi- Brazil's fixed-line teledensity is about 23% higher than service cable provider in Latin America, and is average for Latin America, but there has been little controlled by local media group Globo, although growth since 2002, partly because fixed line rentals are long-distance fixed-line incumbent Embratel owns a relatively expensive compared with other countries in majority of the company's stock. Sky Brasil, the the region. The fixed voice market is dominated by largest High Definition satellite TV operator, is three groups which all have substantial foreign controlled by DirecTV, with Globo as a minority ownership - Spain's Telefonica, which owns Telesp shareholder. Independently of Net Servicos, Embratel (and mobile provider Vivo), Mexico's America Movil, also provides satellite TV services. which owns Embratel (and mobile provider Claro) and fixed/mobile provider Oi (Telemar Norte All of these companies provide TV/broadband Leste/Telemar), which is owned by Portugal Telecom double-play packages, except for Sky, which has a and Brazilian investors. The market leaders are the partnership with GVT for broadband services. two incumbents Oi and Telesp, with 48% and 27% However Sky will soon enter the broadband market as respectively of the fixed lines in the country. Two it is now in the process of establishing one of the first other companies, the long-distance incumbent deployments in the world of TD-LTE technology, Figure 2-5: Growth in average traffic exchanged on Brazil’s IXPs (Source: http://www.ptt.br) 16 Technology Users (1000s) xDSL 10222 Cable Modem 4121 Ethernet 794 Spread Spectrum/Wifi 647 ATM 383 Fibre 185 HFC 151 Satellite 40 FR 24 FWA 23 WIMAX 19 MMDS 10 BPL/PLC 0 Total 16619 Table 2-1: Broadband users by type of technology, Figure 2-6: Mobile coverage in Brazil 1000s, February 2011 (Source: Anatel) (Source: http://www.teletime.com.br) following its purchase of radio spectrum in the Triple-play bundles (voice, Internet and IPTV) and 2.5GHz band. quad-play bundles (plus mobile) are becoming increasingly available, following recent consolidation Fibre to the home (FTTH) is now beginning to take of fixed, mobile and subscription-TV providers. The off in Brazil's major cities, seeing much increased triple-play leaders in this area are GVT in partnership investment over the last two years. Telefonica Brasil is with Sky, and TVA (owned by the Abril Group and among the largest providers of FTTH services and is Telefónica), while Oi launched the first, and so far planning to extend its network coverage, initially only, quad-play service in the country in 2008. focussing on Sao Paulo state. Backed by Telefonica of Spain, the group already has fibre coverage of a 2.2.4.2 Mobile broadband potential 400,000 households, of which 20,000 are currently signed up to its services. By the end of 2011 There are seven GSM operators in Brazil – Vivo, it plans to increase coverage to about one million Claro, TIM, Brasil Telecom, Oi, Sercomtel and CTBC households and boost the actual subscriber base to (now Algar Telecommunications). By August 2011 70,000, with a long term plan to have one million they had rolled out 3G services in 28% (1,588) of the fibre customers by 2015. 5,565 municipal areas, covering about 144 million people, or 76% of the total population. Vivo is the Intelig, a subsidiary of TIM Brasil (owned by Telecom dominant player in numbers of subscribers and also in Italia), has launched broadband and telephony terms of coverage - it is present in over 1,500 services using broadband over powerline (BPL) municipal areas, while it's nearest rival, Claro, is technology in areas of Sao Paulo city, provided over present in only about 500 so far but is expanding fast the infrastructure of local power utility Eletropaulo. with plans to cover 1000 by the end of the 2011. 512Kbps- 2Mbps- 12Mbps- Speed 0-512Kbps > 34Mbps Total 2Mbps 12Mbps 34Mbps Subscribers 2977 6961 4215 1972 496 16621 Table 2-2: Fixed broadband subscribers by speed of access, 1000s, February 2011 (Source: Anatel) 17 The federal government has a long history of support Having heavily invested in new 3G spectrum (a total for local industry to develop low cost access devices. of R2.7 billion was realised in the H band auction in In 2000 strong efforts were made to establish December 2010), the mobile operators are now reference models for low-cost open-source based PC rapidly expanding their 3G networks, which should manufacture. As a result Linux is widely available as cover at least 2,000 municipalities by 2012. In the H an option on locally made desktop and laptops from band auction, a new operator, Nextel, acquired the major white-goods chain stores and other outlets. frequency in virtually all of Brazil and will soon In 2010 it was estimated that about 14 million, mostly become a specialised 3/4G competitor in the market. locally made computers, had been sold in Brazil, often on instalment plans provided by the major retailers. The government is looking to ensure that 4G/LTE networks are in place in time for the FIFA World Cup Recent plans to provide tax incentives to promote the in 2014, and it has already identified about R200 local manufacture of low-cost tablet devices echo million worth of investments to encourage this. these earlier efforts, and have attracted Taiwanese Bidding for 4G mobile network licenses is scheduled computer manufacturer, Foxconn Technology, to for April 2012. produce Apple's iPad tablet in the city of Jundiai in Sao Paulo state. In addition Motorola, Samsung and 2.2.4.3 Satellite Asus have also expressed interest in producing tablets locally. Because of the remoteness of many areas in Brazil, the country has an extensive satellite sector. Three 2.2.6 Public access facilities companies operate national satellites: Star One, Telesat Brasil, and Hispamar. Star One was the first to Internet cafes, or LAN-houses, as they are commonly provide satellite services, and is the market leader. Star called in Brazil, are widely used throughout the One C3, scheduled for launch in 2012, will cover all country and are present in virtually every community, of South America including Brazilian territorial either to serve the youth in the richer areas, or to waters. The launch of Telstar 14R (known as Estrela serve the general population in the poorer areas. do Sul 2 in Brazil), was launched in mid-2011 and Privately run, usually by small businesses (90% of covers the whole Brazilian territory as well as which are informal), Cetic.br16 estimated in 2010 that delivering services to the rest the Americas. there were about 100,000 in the country, serving 30- 35 million people. This is a slight decline on previous 2.2.5 Access devices years, most probably because of the increased penetration of broadband in homes and on mobiles. PCs and laptops are becoming more widely present in households, although smartphones are now the Provision of public access facilities for those who dominant consumer broadband access device in cannot afford their own equipment and connections Brazil. In total it is estimated that there are 60 million has also long been part of the Brazilian government's PCs and laptops in use in Brazil, rising to 100 million digital inclusion strategies. The largest of these is by 2012. Not all of these are connected to the government parastatal Serpro's17 digital inclusion Internet and many are in businesses or large programme (PSID18) which has rolled out over 8,000 households which share their Internet connection. telecentres since 2003, providing free access in 98% of municipalities. Part of Serpro's remit is to facilitate In contrast, there is a closer match between the citizens' relations with the government, including the number of 3G phones and the number of 3G development of e-government applications. The broadband subscribers, although the match is not 1:1. programme includes donation of computers to public In a field survey, Grupo Mobi estimated in February and civil society institutions. 2011 that there were 19 million smartphones in Brazil; this is higher than the number of 3G subscribers due to the large number of subscribers with multiple phones, and many using smart phones on 2/2.5G 16 Center for Studies on Information and Communication subscriptions. The survey found that 41% of their Technologies 17 Formed in 1964 to modernise the strategic sectors of the sample of mobile phone users in general, and 83% of Brazilian Public Administration, Serpro is one of Brazil's largest the smartphone users used their phone to go online. public companies, responsible to the Ministry of Finance. 18 Programa Serpro de Inclusão Digital http://www.serpro.gov.br/inclusao/oprograma 18 Serpro is now developing a new programme with the networking sites, the distinctive independent forms of Ministry of Agricultural Development which will cultural expression in Brazil, the substantial efforts by support integrated management of telecentres, called government to provide online services, and by the the Brasil Digital Network19 which will be used to lack of Portuguese content elsewhere (except to a support the digital inclusion initiatives of both certain extent in Portugal). institutions. The proposal is to form a central database with information from a variety of digital In addition, e-commerce services for consumers are inclusion initiatives in order to generate inputs for the widespread, partly due to the relatively high implementation of government policies. proportion of the population that have bank accounts and credit cards23. It is expected that e-commerce will In addition to a tool kit for the management of have a turnover of US$18.7 billion at the end of 2011, telecentres, the Brazil Digital Network provides a representing an increase of around 26% compared to decision-support system. The data are presented in 2010. By the end of 2011 it is expected that about 32 reports and graphs, as well as geo-referenced, million people will have made at least one purchase providing a mechanism for monitoring and tracking online. of benefits to the population and the variables that hamper the smooth operation of telecentres in Brazil. Another indication of trends in Brazilian applications and content is that Google Brazil's revenues grew Serpro's PSID is also collaborating with the 80% in the last year, bringing in close to US$500 government's Casa (House) Brazil project20, million. Broadband in Schools21 and One Laptop per Student programmes22. 2.3 Patterns of broadband utilization Casa Brazil is a similar but much smaller project, also As of mid-2011 there were an estimated 43 million established in 2003. Working in poor communities, broadband subscribers in Brazil, representing a the project provides computers and connectivity to penetration rate of about 23% of the population. communities, focusing mainly on use of open source With about 74 million Internet users in the country, technologies to promote culture, art, entertainment, this brings the proportion of broadband subscribers popular participation and community liaison. A Casa to about 60%. Brazil typically has a telecentre, a reading room, an The rate of broadband uptake also appears to be auditorium and several laboratories and workshops accelerating fast - new activations hit a record in the where use of digital technologies can be made. About month of August 2011 when there were 2.2 million 100 units have so far been established with support additions, compared to the average of about 1 million from the Ministry of Science and Technology, in a month between July 2010 and July 2011. As a partnership with other government agencies, the whole, broadband subscriber growth of about 60% private sector and municipalities. was recorded over the last year, and 3G broadband overtook fixed broadband subscriptions. Telebrasil's Banco Brazil and other large businesses are also August 2011 assessment indicates that fixed donating computers to public access programmes broadband grew by 25% in August 2011, while such as the above to support digital inclusion efforts. mobile broadband had a growth rate of 87%. Other features of broadband uptake in Brazil include: 2.2.7 Content and applications About 27.4% of households had Internet access of With a large population and advanced electronic and some form in 2009 according to IBGE's National print media market, along with the relatively high Household survey, while 12% of households had number of wealthy people, Brazil's local online broadband access in 2010, estimates IPEA. content market is well-developed. This has been encouraged by the popularity of local social Regional variations in access to broadband are large, mainly reflecting the pattern of income levels and 19 Rede Brasil Digital http://www.serpro.gov.br/inclusao/rede- population densities. About 80% of broadband users brasil-digital / redebrasildigital.org.br 20 http://www.casabrasil.gov.br 21 Banda Larga nas Escolas http://www.inclusaodigital.gov.br/links-outros- 23The reasons for this date back to the years of hyper inflation in programas/programa-banda-larga-nas-escolas the previous century, where funds kept in bank accounts were 22 Um Computador por Aluno http://www.uca.gov.br index linked to maintain their value. 19 Fixed line subscribers 42.0 million Mobile Subscribers 224.0 million Fixed Broadband Subscribers 15.2 million 3G Phone Users 22.8 million 3G Modems/Data Terminals 5.6 million Total 3G users 28.4 million Total 3G + Fixed Broadband subscribers 43.61 million Broadband penetration 23 % Internet users 74 million Broadband users as % of total Internet users 59 % Municipal Districts with 3G 1594 Average 3G speed 769 Kbps Broadband subscriber growth Aug 2010-Aug 2011 60 % Subscription/Cable TV Subscribers 11.1 million Cable TV broadband subscribers (Q4 2010) 3.7 million Computers in use 60 million Table 2-3: Key features of the broadband market in Brazil (Source: Anatel, Teleco) Note: Data are for end of Q2 2011 unless otherwise stated. are concentrated in the Southeast, while the Northeast and 153.6 million in 2020. If no action to encourage and Midwest have 9% each, and the North, only 2%. public or private investment takes place, this Subscription/Cable TV had about 11.1 million expansion would be limited to 57.3 million in 2014 subscribers in mid-2011, representing a growth of and 93.2 million in 2020. 31.8% over the last 12 months. The IPEA estimates that if the price for broadband is A number of projections have been made on the reduced to the PNBL target of R35/month (see next future levels of broadband uptake. These include: section), the number of households connected would rise to 35 million (52% of total households). Mobile chip manufacturer QUALCOMM estimates that there are likely to be over 107 million 3G Brazil also has had an extensive 'Broadband in subscribers in Brazil by 2014. Schools� program which has resulted in about 84% of Brazilian students having access to free broadband in Telecom industry group SindiBrasil estimates that if urban public schools. investments of about R145 billion are made in network infrastructure and services, broadband penetration could reach 78 million subscribers in 2014 20 3. The PNBL Beginning with the PGR in 2008, the Federal and and the Ministry of Communications. Telebras has State governments have adopted extensive and wide also been made responsible for ensuring that ranging strategies for supporting improved access to connectivity is provided for some of the 2014 World broadband. These efforts emerged from much earlier Cup stadiums. initiatives to promote the uptake of ICTs more generally in Brazil, prior to the advent of 'broadband The government owns 89.88% of Telebras shares Internet'. with voting rights, and 72.67% of the share capital. In June 2011 it was announced that additional private The first systematic effort by the Government took investment in Telebras can be made, but that place in 2000 when the then President Henrique government would still maintain control. Telebras' Cardoso issued a decree to establish the Secretariat business model envisions it to be cash flow positive for Logistics and Information Technology in the by its 2nd year. Ministry of Planning, Budget and Management (SLTI/MP), as the lead agency for developing and Aiming to cover 40 million households or 68% of the implementing Brazil's 'e-strategy'. SLTI/MP served as population by 2014, Telebras core activity will be to the secretariat for an inter-agency committee chaired act as a 'wholesale' operator, providing infrastructure by the President’s Civilian Chief of Staff24 - the and network capacity for the broadband providers, as Executive Committee on e-Government, to which a well as the administrations of the federal government, number of inter-agency technical groups reported. the states and Federal District, municipalities and non-profit organizations such as universities, schools, ICT development at the Federal level continued hospitals, community telecentres and other points of during the first administration of President Lula da public interest. Telebras will also manage the Silva (2003-2006), and some progress was made in deployment of a national fibre network which will digital inclusion, with the development of an eventually reach 3,045 municipalities without access interoperability framework and other aspects of e- to fibre. applications development. E-strategies also advanced at lower levels of the federal system, albeit unevenly In essence the overarching strategy with the revival of in the 26 states and the Federal District, as described Telebras has been to create a public broadband further below. operator that will compete with the private operators in order to lower prices and improve service levels. Developed by the Lula government in 2010, the The government's view is that the private broadband culmination of earlier efforts toward digital inclusion providers are not competing effectively and therefore is the PNBL (Programa Nacional de Banda Larga, charging too much and giving poor service. MiniCom National Broadband Program), which, after about a cites as evidence for this the fact that average year of preparation, marked its first deployment in broadband prices have already dropped by 50% since August 2011. The five key objectives of the PNBL are the announcement of the PNBL strategy, even prior to: to any actual roll-out of services.  Broaden access to broadband-based Internet Not unexpectedly, the larger providers have criticised services the entry of a state funded entity into the market  Accelerate economic and social development arguing instead that the government's role should be  Promote digital inclusion restricted to stimulating demand, such as through provision of improved online services and perhaps  Reduce social and regional inequalities subsidising users. Nevertheless some of the larger  Promote job creation and income providers have signed agreements with Telebras, and a large number of the smaller operators have To implement the programme, the dormant former approached Telebras, seeing the opportunity to break state-owned monopoly operator, Telecomunicacoes the control of the larger operators on the market. Brasileiras (Telebras), was revived and given the task, working closely with the national regulator, Anatel, The service is expected to be particularly useful to small broadband providers operating in the smaller 24 Ministro da Casa Civil towns and more remote areas that have not been 21 reached effectively by the large operators. So far The scope of the PNBL may widen further if the about 600 broadband providers have registered their PNBL adopts the September 2011 recommendations interest on the Telebras web site, with 1000 of the IPEA. The IPEA proposes a series of measures registrations expected by the end of the year. to address those at the bottom of the pyramid who cannot even afford the R35/month target price for The other key actions being taken by Telebras and the broadband. These include extending tax breaks to government agencies to achieve the PNBL objectives mobile phones and television sets, more public above are: support for additional public access/telecentre facilities, and offering prepaid plans and fractional  The establishment of a broadband prices (weekly rates for example). price/performance target of R35 per month for a 1Mbps connection The key elements of the envisaged activities outlined  The provision of broadband services directly above, along with other related government initiatives to consumers where other operators are not are described in more detail below. present or providing inadequate services  Provision of soft loans to small broadband 3.1 Price and performance targets providers to expand their services25  Freeing up additional radio spectrum for use The R35/month target was determined by field in broadband provision research which indicated that the 70% of the Brazilians that are still offline would be willing to pay  Tax exemptions for equipment and providers this amount for the connection. As mentioned above meeting local manufacturing or performance however, the September 2011 IPEA indicates that objectives even this price is still too high to be affordable by the poorest segment of the population. In addition the The PNBL also aims to support the development of R35/month target does not include the cost of the the Brazilian ICT equipment and related services subscriber equipment, and this could also be a industry, which is seeing strong international significant barrier to entry unless bundled into long- competition especially from China. As with all term contracts. government purchasing, Telebras is able to give preferential treatment to Brazilian firms by allowing The initial speed target is perhaps the more difficult its procurement process to select local companies component to derive, since 'broadband' is such a even if the cost is higher than the bids of foreign rapidly evolving area27, and in fact the initial speed companies. target for the PNBL was 512Kbps, but this was subsequently increased to 1Mbps shortly after the A consortium was formed in July 2011 to promote Rousseff government took over. the development of local Brazilian ICT equipment sector, called GENTE26, which consists of companies Currently, operators using the Telebras network are that each invest more than R150 million of their sales initially required to provide a minimum of 20% of the in R&D (about 20%). This includes Gigacom, CPQD, target speed of 1Mbps, but the government is ASGA, WXBR, Trópico, Icatel, Parks, Digitel e planning to ensure the speed of offerings of all Datacom and PadTec. Padtec recently won Telebras' broadband connections in the country is guaranteed. R68 million tender for hardware to support the As a result Anatel has proposed that providers with PNBL rollout. The company is a subsidiary of the more than 50,000 customers will have to deliver to Centre for Research and Development in users at least 60% of average contracted plans. The Telecommunications (CPqD), a private foundation rule also provides for raising the requirement to 70% that was the technology arm of Telebras prior to its in 12 months, and 80% after the following year. dissolution following privatization of the telephone sector. Telebras still holds a 65.7% stake in Padtec. Efforts are also being made to monitor and benchmark the quality of available broadband services. In mid-2011 Anatel proposed the establishment of a broadband speed test service 25 Lines of credit have been made available by the National which would be available to subscribers directly, and Development Bank (BNDES) with interest rates of 1% per month and no collateral requirements. 27It may be recalled that the maximum speed only a decade ago 26 Grupo de Empresas Nacionais de Tecnologia was 56Kbps dialup or GPRS was the standard 22 the test is now available on the NIC.br web site. 3.2 Coverage targets However Sinditelebrasil, the national lobby group of telecom operators and service providers, has objected As indicated above, the primary target of the PNBL is to using this as a benchmark because it believes that to ensure that 40 million households or 68% of the the variable capacity of the end-user access devices28 population are able to access broadband by 2014. will distort the test and make it unreliable in providing an accurate assessment of broadband quality. In May 2010, the first 100 under-served cities were Sindibrasil has made an alternative proposal that the identified and the availability of PNBL services from ISPs should provide speed measurements directly. Telebras' wholesale facility announced. With a combined population of 14 million, most of the cities Although Telebras' speed target is expected to rise to are in the Northeast (58) and Southeast (30). The 5Mbps by 2014, a major limitation currently is the states with the most cities listed are Bahia, Minas total traffic download limits allowed by Telebras. This Gerais and Rio de Janeiro, with eight listed in each. is only 300Mbytes/month for fixed links and 150Mbytes for mobile links (after which users will be By the end of 2011 at least 300 cities should be responsible for paying additional usage fees). This covered. These have been selected as those at the places a major restriction on the extent of use for the bottom of the Human Development Index (HDI) fixed fee of R35, especially as speeds increase. For and in states that have exemption from sales tax. example, this would only allow a download of one 45minute video29 per month. As a result this aspect of 3.3 Backhaul/backbone network the PNBL strategy has come under criticism from development civil society groups and a number of the broadband providers who have indicated that this will limit their To establish its national backbone fibre network, interest in using the Telebras network, pointing out Telebras is leasing capacity from traditional and that many of their low-end packages already offer alternative infrastructure fibre operators (mainly the better value. For example GVTs basic service is energy distribution parastatals). So far it has 5Mbps for R49 per month and NET offers a triple- established a fibre network of about 35 000kms, play package in Sao Paulo, including 1Mbps internet having reached agreement with Eletronet and for R29.80 per month, taking advantage of the VAT Petrobras. exemption. Telebras is in the process of making similar At the wholesale level, Telebras is selling dedicated arrangements with other wholesale fibre operators, capacity on its network for R230/Mbps/month, such as electrical energy distribution group which is currently about half the available price from CEMIGTelecom in the state of Minas Gerais. the commercial providers. This is a significant decrease and will no-doubt put downward pressure 3.4 Promoting increased broadband on the wholesale market, and should therefore be good value for the small providers. However some competition have observed that combined with the minimum price/performance stipulations, the economics of the In July 2011 Anatel approved rules to increase offering do not yet make business sense. They point competition in the telecom sector with the introduction of the General Plan for Competition30 out that with a 20% minimum performance target this (PGMC) which applies only to the large means only 5 subscribers can share the 1Mbps telecommunication and subscription/cable TV upstream capacity purchased, thereby only generating companies with Significant Market Power (SMP). The a revenue of R175/month (R35/month/subscriber), regulation allows Anatel to compel these operators to which is less than the cost of the capacity purchased share network infrastructure with smaller players who from Telebras. must be offered lower wholesale prices than the SMPs offer at the retail level. In the area of subscription TV, users would be allowed to purchase their own decoders at retail prices. A form of local loop 28 Such as CPU speed, memory, viruses, botnets, downloads running in background etc 30Plano Geral de Metas e Competições 29 Using a rough estimate of 600Mb for a 90minute video in a http://www.anatel.gov.br/Portal/exibirPortalNoticias.do?acao=ca standard compression format such as the AVI codec rregaNoticia&codigo=23195 23 unbundling is also being considered that would allow regulated and increased time limits imposed any provider to sell services on the last mile if the on subscriber data retention31. operator that installed it is not providing services. In  The concept of net neutrality would be addition broadband providers will also will be upheld, whereby providers are not allowed to required to implement 51 new internet exchange limit the speed of any of the data passing to points IXPs. the subscriber The PGMC also aims to create three organizations 3.5 Use of satellite funded by the operators. One will compare the offers from retail services to give more transparency to the A network of free broadband services via satellite, consumer and pinpoint the best options for them. known as the GESAC Program, has been Another will provide a representative forum for incorporated as part of the national broadband operators without significant market power, and a strategy. In November 2010 new contracts were supervisory body will be create a centralized database signed between MiniCom and a private satellite of wholesale offers and to promote conflict resolution operator to expand the number of ground stations in between operators. schools, community telecenters and other public or community entities in areas not served by other Finally, operators are expected to provide a range of broadband services. The number of ground stations backhaul capacities, depending on the city size – 32 will be expanded by 1,460 to a total of 13,379, Mbps (for municipalities of up to 20 000 inhabitants), operating at speeds between 512 kb/s and 2 Mb/s. 64 Mbps (for 40,000 inhabitants), 128 Mbps (60,000) and 256 Mbps (over 60 000 inhabitants). Where there In addition, the auction of four satellite positions for is capacity available companies will have 60 days to private use took place in September 2011, should install the link. reinforce the availability of satellite capacity for remote areas by 2014. In the same month broadband In August 2011 Anatel announced proposed revisions provider Ozônio Telecomunicações announced it to the SCM license (the main broadband service planned to invest US$1.2bn in a satellite based provision license), which aimed to make it easier for internet service for the Amazonas, using the O3b small providers to enter the broadband market. The satellite network which is to be launched in 2013. main changes are to relax the criteria for evaluating IPEA has also proposed that the feasibility of a the credentials of the licence applicant and to create national satellite to complement PNBL be examined. new licenses with smaller geographic scope – state and municipal level licenses. Previously there was only 3.6 Extension of mobile services to the national licence costing R9000 per year, the price remote areas of which remains unchanged, while the annual fees of the new licenses are R1200 for a state license and Another strategy that is being discussed by Anatel to R400 for a municipal license. support the PNBL is to improve mobile network coverage in the more remote and rural areas that are Other planned changes include: currently under-served. The two options being considered are either to provide some type of subsidy  Companies without SCM licenses would be to encourage the existing operators to extend their able to partner with an existing SCM license networks, or to establish a shared wireless holder to provide niche services such as infrastructure managed by a third party which would broadband-based home security systems lease services to the existing operators.  The individual costs of bundled services (such as broadband with IPTV or voice 3.7 Universal service telephony) are to be made explicit and operators required to allow any part of the This year (2011) Anatel has been conducting a 5-year service bundle to be cancelled by the review of voice telephony (PSTN) licenses, the subscriber concessions for which expire in 2025. This includes  Above the 50 000 subscriber threshold the reviewing the licensees' universal service objectives to quality of the provider's service will be 31 Currently only about 13 SCM licensees have more than 50 000 subscribers. 24 ensure they are in line with updated requirements for authorizations to operate in parts of the 3.5 GHz meeting outstanding connection needs in remote and band. rural locations32. In May 2011, Anatel held a series of public consultations on the license review which culminated in new USO proposals. Supporting the Other spectrum liberation activities include: objectives of the PNBL, they included expansion of the fixed network to support broadband services by  Frequencies above 6 GHz will be made ensuring a minimum transmission capacity of 2.5 available for Telebras to provide point-to- Gbps to all municipalities with more than 30 000 point links in municipalities using high-speed inhabitants. In addition the proposals, if adopted, will radios allow operators to apply their license renewal fees  The designation of the 2.170-2.182GHz directly toward universal service projects. band, and the 2.5-2.690GHz band has been changed, in order to foster broadband access, 3.8 Content and applications and has published public consultations regarding the designation of other radio Most government services that can be put online have frequency channels, with similar objectives. already been implemented at the national and state levels, but increased demand for local government 3.10 Subscription/cable TV broadcasting services is to be supported by the PNBL with Federal government plans to establish a cloud services The opening up of the subscription/cable TV sector platform for use by municipalities. This strategy has has been under discussion for some time, but this generated some controversy among some members of intention appears to have been accelerated following the private sector which have said the provision of the announcement of the PNBL. In August 2011 the application services should be left to the private government announced the removal of the legal sector, as with broadband service provision. limitation that prohibited majority foreign owned telecommunication companies from operating in the 3.9 Radio spectrum liberation subscription/cable-TV market. This will allow entry by some of the major telecom providers who are Anatel is accelerating the process of making more foreign owned, notably Embratel, Telefonica, GVT radio spectrum available for broadband, and a and Sky. number of spectrum bands have already been released. With its long-distance transmission The IPEA's analysis of the impact of this measure on characteristics, the 450Mhz band has been opened for broadband-use indicates it should boost the number rural communications, previously held by a number of of subscribers significantly. The agency said in a state agencies. In the 3.5Ghz band Anatel also expects September 2011 research report that the presence of a to allocate a specific segment for the PNBL. The subscription/cable-TV provider could increase fixed availability of the 3.5Ghz band was initially delayed in broadband subscribers in the location by up to 35%. court by the fixed line operators, which challenged Anatel's plan to make the band available for only for 3.11 Fiscal incentives and subsidies new competitors33, but their protest was unsuccessful. Tax levels on equipment and services are relatively Unused parts of the 1.9 GHz band are to be issued to high in Brazil, and according to the telecom industry new mobile operators with the requirement that 3G lobby group Telebrasil, the government tax on services be provided with coverage in all broadband services currently increases the cost to the municipalities of 100,000 inhabitants or more, even consumer by 43%, while taxes on imported modems although mobile services are not under PGO public adds 78% to the price. Some tax exemptions on service regulatory regime. Similar requirements are connectivity services pre-dates the PNBL in some likely to be imposed on operators seeking states, however the government at both federal and state levels is now adopting a broad range of tax 32 1,894 police stations and federal and state roads, 82,301 rural exemptions to promote the uptake of broadband and schools, 7,945 settlements, 10,989 health posts, 2,224 Indian other ICTs. villages, 824 maroon communities, 741 public airfields, 300 conservation and sustainable use offices and 1620 military camps. Responding to concerns that the backbone and 33 The license for the 3.5Ghz band does not allow existing fixed line operators to use it in their market areas. middle-mile networks will not be sufficient to cope 25 with rising local demand for broadband, in August estimates, the tax breaks could help reduce the final 2011 the Ministry of Finance agreed to forfeit an cost to consumers by 20%-30%. estimated R4 billion in tax revenue to encourage operators and suppliers to make R70 billion worth of To promote deployment of broadband to remote and investment in the construction of fibre-optic under-served areas the government is currently networks over the next four years. Priority will be discussing the possibility of subsidising the cost of given for projects that include coverage of North and providing connections to the end user. Northeast regions. The government also plans to discuss with the energy Due to import substitution promotion, foreign ICT distributors the possibility of offering lower electricity equipment is subject to 50% duties and this is prices to small broadband providers. encouraging efforts to develop more advanced local manufacturing facilities to help reduce the cost of 3.12 State and municipal efforts computers, phones and other telecommunication equipment. In 2009, the government announced that Prior to the PNBL there have been a variety of the exemption on taxes for strategic capital goods, municipal and state supported efforts to improve including computers and tablets, would be extended access to the Internet, including the use of tax to 2014. For computers alone, this was expected to incentives and provision of low cost, or even free, cost the government about R1.6bn in 2010. In broadband services in public access facilities and addition all taxes and import duties have been waived schools. These efforts are now accelerating following on computers for the public school system. the PNBL. A growing number of municipalities are participating in the PNBL and partnering with To further reduce the cost of tablets and related Telebras for use of network infrastructure. In the network access devices, in May 2011 the government agreement, the Telebras will use the municipal announced its intention to exempt locally made networks and offer access in cities where broadband hardware from industrial taxes which, when is not widely available. combined with sales tax exemption, could reduce prices to consumers by 30-40%. The bill was passed An example is the state of Sao Paulo which has by the lower house in September and is expected to exempted broadband from sales tax for the last two be approved by Senate shortly. Also in September, years but in August 2011, the State announced that a IPEA published a report proposing that tax complete mapping of the investment by operators exemptions be extended to mobile phones and would be made, including capacity and locations televisions if universal access to the Internet is to be covered. From this, the department will mount a achieved. public investment plan for municipalities not covered. The goal is to ensure that in the next two years, all A growing number of states are exempting broadband municipalities of less than ten thousand inhabitants in from sales taxes. In 14 of the 26 states (which have a urban areas have broadband access – this is expected total of 49% of the population) agreement to exempt to be about 230 cities. Where current operators broadband from sales tax (VAT) has recently been indicate they are unlikely to cover these cities within reached. However of these, only seven have signed two years, the state will offer finance and tax the exemption in local law - Sao Paulo, Rio de incentives to other operators to ensure that access is Janeiro, Espirito Santo, Parana, Goias, Pernambuco provided. and Pará. The remaining states where this is pending are Distrito Federal (Brasilia), Acre, Amapá, Ceará, The State of Paraná has been taking a different Rio Grande do Sul, Santa Catarina and Sergipe. approach to improving connectivity for its citizens, using the state energy company, Copel34, as its Brazil's lower house has given approval to a proposed primary vehicle for this. The Paraná State Plan for measure offering tax breaks for national production Broadband was adopted in August 2010 and in of tablet computers. The bill, which must still gain February 2011, Copel announced that it would use its final approval in the Senate, would offer 17 000 km fibre optic network to provide 100Mbps manufacturers full exemption from industrial broadband connections. With an investment of R100 manufacturing and retail taxes, as well as import taxes million, the company plans to ensure 100% coverage for electronic components. According to government 34 Companhia Paranaense de Energia 26 of all municipalities by 2012. Paraná State is allowing cities. Coverage of 92% of the population was Copel to defer its tax payments in return for a) expected by July 2011. Known as the Ceará Digital ensuring the wholesale 1Mbps price is R230 or less, b) Belt35 (CDC), with an investment of R65m, a ring of reserving 15% of capacity for low-income groups 2500 km of fibre has been established linking all 56 paying R15/month or less, and c) reserving another metropolitan areas. Free access is provided to all 15% of capacity for services at R30 per month. In public institutions in the state. addition a 10:1 maximum contention ratio is specified by the state. At the city level, the mountain municipality of Canela with about 40 000 inhabitants near Porto Alegre has The State of Ceará is also amongst the most advanced become a digital city role model. In March 2011 in its efforts to ensure broadband access for its Canela planned to open a 1 Gbps network, developed citizens. In 2008, the state government decided to in partnership between city and federal governments create its own fibre optic and WiMax infrastructure, and private enterprise. The network has been with the aim of providing broadband access in major established mostly with support from the private sector in provision of infrastructure. 35 Cinturão Digital do Ceará 27 4. Lessons Learned When the Cardoso government promoted the cost of providing connections to those who cannot privatisation of the telecommunications sector in afford current market rates. Brazil in 1998, the promise was that increased competition would bring down prices. While the In any event, ‘the proof is in the pudding' and it extension of services has reached most areas for remains to be seen how effective Telebras will be in voice, prices have remained relatively high, and the competing with the private sector to drive down availability of new services such as broadband has prices and extend the range of services. However it been slower and more costly than expected. In already seems that simply the threat of this type of addition the telecom sector has become more initiative has already caused the private operators to concentrated among fewer dominant players which respond by lowering prices and increasing their are mostly owned by foreign operators. The PNBL is coverage targets. clearly responding to this market environment, aiming to reduce costs, increase coverage and support local In Brazil, as in China, the role of the state is notable Brazilian industry. in equipment development and the efforts of the government to support local manufacture of It is notable that the PNBL did not come out of equipment are extensive, ranging from R&D support, nowhere, and builds on much prior experience, tax breaks and import barriers for foreign equipment. including in sector regulation. However most The effectiveness of import barriers is as yet unclear, initiatives concentrated on public access facilities but currently the cost of much of the consumer (telecentres), e-applications development and low cost equipment available in Brazil is higher than it is in access equipment – open source, locally manufactured Europe or North America. This has also resulted in a desktop computers. Since then the environment has small but significant grey market in ICT goods, either moved on, broadband has become a priority, local bought from tourists, or while travelling abroad, and applications development has continued to take place sometimes even smuggled in. and access devices have switched to laptops, smartphone and tablets which are a once-off cost and Among the other key issues that the initiatives taking becoming increasingly affordable. As a result lowering place in Brazil have drawn attention to so far are: broadband costs and improving performance is rightly seen as the key priority to achieve digital  The setting of performance targets for the inclusion and leverage the benefits of ICTs for quality of broadband services under the development. PNBL has highlighted discussion of the relative importance of speed versus traffic The operators' mixed reactions to the PNBL has limitations. Many have said that with low highlighted the continuing tension between public monthly traffic caps, access to higher and private sectors, and between the dominant players broadband speeds is largely meaningless. and the small ones, in defining the best way forward. The technical and market complexity of Internet  Price target setting needs to be able to take provision generally, and in Brazil in particular, has not into account bundled service offerings which helped either side to identify a clear collaborative can extend the basic broadband service to strategy, and as elsewhere in the world, this is an double and triple-play, where TV and voice ongoing area of debate. services may be part of the broadband package. In fixed line ADSL services, the The discussion over the role of the public versus the bundling of voice telephony subscriptions is private sector is also taking place within different also very common, but increasingly unneeded parts of the federal government. Subsequent to the due to the availability of mobile telephony. announcement of the PNBL, which was largely developed by the Ministry of Planning, some other  If the setup cost for the access equipment parts of government have indicated that they are not (modem and terminal device) is not taken entirely in agreement with the strategy, and similarly into account, and remains at market -related to the private operators, have indicated their prices, the lowest income-groups will likely preference for a model focussing on subsidising the find the cost of entry unaffordable. Some 28 operators have initially responded by making Brazil, the variation in the extent of a USB modem free if a contract is signed, but exemptions underscores the need for buy-in this is not guaranteed to continue indefinitely. at each level of government.  Brazil's experience also show that tensions  Top-level support from government has been between broadcast and telecom sectors, and observed as a key feature of many of the between fixed and mobile sectors needs to be more successful national broadband plans, anticipated. The broadcast sector will resist and Brazil is no exception. The PNBL was opening up to telecom operators and the devised under the previous President Lula's subsequent debate over network neutrality close leadership and reaffirmed by the can slow down implementation of effective current President Rousseff, who said, in her solutions. first public address to the nation following her taking of office earlier this year, that the  Technically, the debate over the ability of implementation of the PNBL would be mobile operators to service the demand for accelerated. At the other end of the high speed broadband (>5Mbps) continues. spectrum, the efforts of a number of Clearly, in developing and emerging markets municipal governments to support where the penetration of fixed infrastructure broadband development, and even provide is low, mobile wireless will have a vital role to free broadband services, are noteworthy, play for some time to come. But even in highlighting the important role of municipal these markets, notwithstanding the lack of governments in provision of broadband as a experience with LTE, fixed-line infrastructure utility, just like water, electricity and – fibre to the home in particular, may well be sanitation. Finally, the variation in activities the ultimate evolutionary path to cope with of the federal, state and municipal exploding demand for capacity. governments also calls attention to the need for all levels of government to co-ordinate  The consolidation of fixed, TV and mobile their efforts to ensure the most effective use operators in single integrated companies of resources and to make affordable high offering triple- and quad-play services is also speed broadband available as quickly as taking place around world trend, improving possible. operator profitability with economies of scale, streamlined management and better  The opportunity to massively reduce the optimization of investments. Demand for costs of broadband network deployment by broadband is also an accelerator of this ensuring access to other complementary process in the mobile sector - with 3/4G infrastructure sectors – namely power and mobile broadband, the only way to scale transport, has not gone unnoticed by services sufficiently is to use fibre in the Brazilian broadband policy makers - one of backhaul transmission to connect cell sites. Telebras' first actions was to secure access to These conclusions seem to be gaining wider the fibre infrastructure of the petroleum and acceptance as underlined by the merger of electricity distribution networks. However Embratel and Claro, the purchase of GVT by less discussion has so far taken place for the Vivendi and the efforts of Telefonica to buy future advantages of ensuring that ducts are Portugal Telecom's share in Vivo. A similar provisioned in every new road, and ensuring dynamic is also evident between the smooth and low cost access to rights of way broadband and TV broadcasting sectors. for fibre cable.  Fiscal measures such as tax exemptions for  In making additional radio spectrum available equipment and broadband services are a key for broadband, the tensions with the plank in Brazil's broadband strategy, but do dominant players, and incumbent mobile not seem to be as well recognised elsewhere. operators in particular, to use control over Brazil's approach is particularly innovative in access to spectrum as a way of staving off that it proposes to exempt operators who competition, signals the importance of reduce the cost of their offerings by a forward planning in spectrum management significant margin. In a federal system such as 29 and the need for strong independent policy- society and providers wherever the promotion of making. access to ICTs has become a national policy issue. In In conclusion, although it is early days in the PNBL this respect the Brazilian experience is and will programme, developments over the coming year will continue to be a valuable one for most other be watched with keen interest by policy makers, civil countries planning broadband strategies. 30 5. Annexes 5.1 A timeline of events relating to the PNBL August 2009. The Steering Committee for Digital Inclusion Programmes is formed, which lays the groundwork for the PNBL. May 2010. The PNBL is officially announced by Government decree 7.175. June 2010. Supported by the CGPID, a series of public consultations on the PNBL takes place with civil society, private sector and government officials. 24 Aug 2010. Complementing the 16 State capitals already announced, Telebras publishes the list of the next 100 cities that will receive broadband access by end 2010. It said a further 1063 cities are planned for 2011. November 2010. Padtec, a Campinas based Brazilian equipment supplier, wins Telebras' R68m tender for hardware to support the PNBL roll-out. A consortium of 29 operators, represented by SindiBrazil, files an objection in the Federal Court in Rio de Janeiro claiming that Telebras does not hold the power to provide services for the Federal government, and saying that the use of Telebras as a state company is "anticompetitive". The claim is not upheld. Anatel approves measures allowing operators to apply their license renewal fees directly toward universal service projects. The government announces plans to host cloud-based applications in support of the PNBL to make it easier for municipalities to provide online content. January 2011. The budget for the PNBL is revised – Initially, R600 million was to be released to Telebras in 2010 and R400 million in 2011. Now, Telebrás is to have R316million for 2010 and an additional R273 million in capital investment in 2011. Federal development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES), provides credit lines without collateral requirements to small Internet providers participating in the PNBL. Telebras is issued with an SCM license and thereby authorised by Anatel to provide services to the last mile. February 2011. The new Secretariat for Digital Inclusion is inaugurated by the federal Government Ministry of Communications. Fibre optic cable reaches Manaus (the capital of the Amazonas) via Venezuela in a joint project with Brazil to interconnect the power and fibre networks of the state utilities of Eletrobrás and the Compañia Anónima Nacional Teléfonos de Venezuela (CANTV). Seven Brazilian state governments agree to eliminate state taxes for broadband service provision and tablet computers will also be exempt from federal taxes, in line with the existing exemption on PCs and laptops. April 2011. Telebras announces that it had invested R166m in equipment and services to establish itself as a broadband provider. May 2011. Telebras reaches agreement with Petrobras and Eletrobras (Furnas, Chesf, Eletrosul and Eletronorte) to use the fibre networks of their energy distribution grids. Government announces intention to reduce taxes on locally manufactured tablet computers. June 2011. Government moves to encourage additional private investment in Telebras. 31 The 'Broadband is Your Right' campaign is launched by a coalition of civil society groups. August 2011. The cable TV market is opened to telecom operators and others with foreign-ownership exceeding 49%. After public consultation Anatel releases the proposed revisions to the SCM license which aims to make it easier for small providers to enter the broadband market. The Ministry of Communication announces that it plans to ensure that at least 80% of metropolitan areas will have 4G coverage by 2014 (in time for the FIFA World Cup). To achieve this, tenders for the provision of 4G are being speeded up and the first set of tenders will be issued in April 2012. Telebras announces that budget cuts for the PNBL programme this year from R1bn to R350m will delay the roll out but that 250 cities should be covered by end 2011. Mobile operator Claro announces that it will join the PNBL and is now able to provide a 1Mbps service based on 3G in 515 cities for R29.90 / month (with a 200Mb/month traffic cap). Claro also said that by the end of 2011 the service will be available in 1017 cities. The city of Santo Antônio do Descoberto in Goiás state is the first to see the rollout of PNBL with residents able to obtain the 1Mbps service. The Federal government says it will provide tax exemption for the deployment of new telecommunication networks in areas which are not yet served. Telebras signs a contract with the state of Ceara to use its 740km of it 2500km fibre backbone for the PNBL. September 2011. Brazilian manufactured tablets become available. Brazil's government (lower house) agrees to exempt locally manufactured tablets from the federal taxes, which is expected to reduce tablet price by 30%. The bill now goes to Senate. Telecom operator GVT, part of the Vivendi Group, announces it will invest U.S.$300–500 million to build a backbone network International in partnership with international carriers. Telebras announces that it has signed contracts to supply network infrastructure for more than 20 Internet service providers and expects to close the year with more than one thousand ISPs registering their interest on the Telebras web site (currently about 600 have registered). 5.2 Relevant links 5.2.1 Government agencies Cabinet Office of the President http://www.casacivil.gov.br Ministério das Comunicações (primary broadband policy maker) http://www.mincom.gov.br Anatel (National regulator) http://www.anatel.gov.br PNBL – http://www4.planalto.gov.br/brasilconectado/pnbl 5.2.2 Multistakeholder Internet Management CGI.br (Internet governance) http://www.cgi.br CETIC.br (Internet Metrics) http://www.cetic.br PTT.br (Internet Exchange Points) http://www.ptt.br CETIC.br & NIC.br - Reference centres for indicators and statistics on the use of ICTs in Brazil http://cetic.br http://nic.br Digital Cities Guide http://www.guiadascidadesdigitais.com.br 32 5.2.3 Major broadband and telecommunication operators active in Brazil AES Com http://www.aescomrio.com.br Cemig Telecom http://www.infovias.com.br Claro http://www.claro.com.br CTBC http://www.ctbc.com.br Dialdata http://www.dialdata.net.br Diveo http://www.diveo.net.br Dsli vox http://www.dsli.com.br Easytone http://www.easytone.com.br Eletropaulo Telecom http://www.eletropaulotelecom.com.br Embratel http://www.embratel.com.br Engevox http://www.engevox.com.br Epsilon informática http://www.epsilon.com.br Global Crossing www.globalcrossing.com Global Osi http://www.globalosi.com.br GT Group http://www.gtgi.net GVT http://www.gvt.com.br IDT http://www.idtlatinamerica.com Nextel http://www.nextel.com.br Oi/Telemar http://www.oi.com.br Portugal Telecom Brasil http://www.portugaltelecom.pt Sdw http://www.sdwtecnologia.com.br Sercomtel http://www.sercomtel.com.br Sky http://www.sky.com.br Telebras http://www.telebras.com.br Telefonica http://www.telefonica.net.br Tellfree Brasil http://www.tellfree.com.br Tim http://www.timbrasil.com.br Tmais http://www.tmais.com.br Transit do Brasil http://www.transitbrasil.com.br Vivo http://www.vivo.com.br 5.2.3 Industry Associations Abramulti36 ISP industry association http://www.abramulti.com.br Abranet Brazilian Internet Association http://www.abranet.org.br Abrater37 Rural telecommunication providers association http://www.abrater.org.br Abrint Assocation of Brazilian Internet and Telecommunication service providers http://www.abrint.com.br Campaign for Universal Broadband http://campanhabandalarga.org.br Conapsi38 Internet Service Providers Assocation http://www.conapsi.org.br SINDITELEBRASIL39 Lobby association of the 40 largest telecom operators http://www.sinditelebrasil.org.br TelComp40 Telecom industry association http://www.telcomp.org.br Telebrasil41 Association of Brazilian Telecom operators http://www.telebrasil.org.br 5.2.4 ICT and broadband market information sources Teleco http://www.teleco.com.br 36 Associaçaõ Brasileira dos Provedores de Internet e Operadores de Comunicação de Dados Multimídia – 37 Associação Brasileira de Telecomunicações Rurais 38 Conselho Nacional das Entidades de Provedores de Serviços de Internet 39 Sindicato Nacional das Empresas de Telefonia e de Serviço Móvel Celular e Pessoal - 40 Associcao Brasileira des Prestadoras de Servicos de Telecommunicoes Competitivas 41 Associação Brasileira de Telecomunicações 33 Teletime http://ww.teletime.com.br 5.3 Glossary BPL – Broadband Over Powerline CERT - Computer Emergency Response Team CGI - Comitê Gestor da Internet no Brasil (Brazil Internet Steering Committee) DSL – Digital Subscriber Line FTTH – Fibre to the Home FUST - Fund for the Universalisation of Telecommunication Services IPEA – Institute for Applied Economic Research IXP – Internet Exchange Point PGMC – Plano Geral de Metas e Competições (General Plan for Competition) PGMU – Plano Geral de Metas para a Universalização (General Plan of Universalization Goals) PGO - Plano Geral de Outorgas (General Grant Plan) PGR - Plano Geral de Atualização da Regulamentação das Telecomunicações (General Update Plan of Brazilian Telecommunications) PNBL – Plano Nacional de Banda Larga (National Broadband Plan) PSID – Programa Serpro de Inclusão Digital (Digital Inclusion Programme) PSTN – Public Switched Telephone Network PTT - Ponto de Troca de Trafego (Traffic Exchange Point – IXP) RNP - Rede Nacional de Ensino e Pesquisa (National Research and Education Network) SCM – Serviço de Comunicação Multimídia (Multimedia Communications Service) SERPRO - Center for Studies on Information and Communication Technologies USO – Universal Service Obligations 34 About infoDev infoDev is a global development financing program among international development agencies, coordinated and served by an expert Secretariat housed at the World Bank Group, one of its key donors and founders. It acts as a neutral convener of dialogue—and as a coordinator of joint action among bilateral and multilateral donors—supporting global sharing of information on ICT for development (ICT4D), and helping to reduce duplication of efforts and investments. infoDev also forms partnerships with public and private sector organizations who are innovators in the field of ICT4D. infoDev is housed in the Financial and Private Sector Development (FPD) Vice Presidency of the World Bank Group. For additional information about this study or more general information on infoDev, please visit www.infodev.org/publications. 35