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Brazilian Plan to Disseminate Internet Access Underway
Source: Xinhua
Source Date: Wednesday, March 16, 2011
Country: Brazil
Created: Mar 17, 2011

The National Broadband Plan (PNBL), with participation of 13 ministries, is coordinated by Bernardo, who explained details about the project on Tuesday along with Joao Santana, president of Telebras, the state-owned enterprise responsible for managing the project.

The authorities have criticized companies that offer internet service for failing to spread internet use in Brazil, offering an expensive service with prices amounting to about 50 U.S. dollars monthly, inaccessible to low-income families.

"We ended 2010 with 34 percent of Brazilian households with Internet access, and service is also very poor. Almost half of connections are of 256 mbps. We are out-of-date, with the aggravating circumstance that the connections are very expensive," Bernardo said.

To speed up the process, the government started negotiating with concessionaire phone companies to improve the service quality and lower the price to about 30 reais (18 dollars), which would allow 80 percent of the population to access internet.

"During (former president) Lula da Silva's government, we developed a program to interconnect all schools with internet access, but we also want the private sector to do its share," he said.

At first, the telephone operating companies felt threatened by the government's project, which should result in new business models for the sector, said the minister

"We are working with two alternatives, one for companies to offer cheaper services, and in this model Telebras will be a major supplier. We have a great infrastructure of cables. But if there is no agreement with existing companies, President Dilma (Rousseff) directed us to seek other partners," he said.

Although telephone companies were the ones that initiated the provision of broadband internet, cable television providers are increasing services in this market, which will help speed up spreading internet access.

Telebras President Santana stressed that so far companies that offer internet service focus on clients with higher income, while lower-income sectors are beginning to have partial access via cyber cafes.

The performance of state enterprises, Santana said, will allow small suppliers to grow and extend access to places not covered by large suppliers.

"Five companies now dominate the market for broadband internet and they control transmission networks, excluding other competitors. As the government has already hired the necessary infrastructure for various purposes, Telebras would intervene to manage it and enter the market to promote competition," Santana said.

Telebras plans to invest 5.7 billion reais (3.4 billion dollars) in ten years, of which 3.22 billion (1.93 billion dollars) will be used in the first four years of the project, coming from public funds.

"PNBL's goal for this year is to ensure access in 1,163 cities. We currently have 13 million households with internet access, and our final goal is 39 million households, which means access to about 135 million people," he said.

According to Santana, a study on the impact of the so-called "electronic government" indicated that if relative goals are met, Brazil would achieve a reduction of costs equivalent to about 1 percent of GDP.

"Over 80 percent of public purchases are made through electronic procurement. It is shown that an increase of 10 percent in access to broadband internet represents annual GDP growth of 1.3 percent and in Brazil this percentage may be even higher," he said.
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