GESAC, SCD, FUST, XPTO … and digital inclusion?

By Carlos Afonso RIO DE JANEIRO, Brazil, 03 March 2004

In many countries (especially the more developed ones), and even amongst the main international organisations, there is consensus that losing the race for universal access to new information and communication technologies (ICTs), especially access to the internet and all its services, also means losing the race for human development.

There is also consensus that access alone is not sufficient. People must be trained so they can master this powerful instrument of communication, information exchange and learning. Conditions must be created for the sustainable development of initiatives for the assumption of these technologies to benefit the whole community, with the support of public policies. A national strategy of digital inclusion should be derived from this.

This is particularly important for Brazil, which is one of the world’s most inequitable countries in terms of distribution of the benefits of economic development – it is not by chance that we finally succeeded in electing a government that is essentially concerned with social exclusion.

Brazil remains without a national digital inclusion strategy, which unites civil entities, governments, businesses and the research community in some way in a joint effort to change the scenario in which less than 8% of the population (the large majority being those than can afford commercial access services and a computer) can count on these information and communication resources. A country in which less than 8% of our cities and towns (not to mention the rural population) have effective local means of accessing the internet – a minority that is mainly concentrated in the South East and in the large cities.

The federal government remains without a relevant national strategy, but is making efforts in this direction, an example being the creation of the Comitê Técnico para a Inclusão Digital (Technical Committee for Digital Inclusion), which involves representatives of various ministries under the coordination of the Secretaria de Logística de Tecnologia de Informação (Logistical Secretariat for Information Technology (SLTI) of the Ministry of Planning.

Apart from this, what is happening in Brazil that can affect (in a good or bad way) a digital inclusion process? There are some movements:

One legacy: GESAC

Under the previous government, a programme was established called “Governo Eletrônico – Serviço de Atendimento ao Cidadão” (Electronic Government – Citizens’ Support Service – GESAC), whose objective was to set up thousands of public access terminals so that, through the use of tickets, citizens could have access to the services being offered by the government via the internet. Each terminal – a sophisticated brand name – was very costly (around R$15 thousand, apx $5000USD), and the connection was via satellite, at a monthly cost estimated at R$800 per terminal (apx $270USD).

The plan was to set up about four thousand of these terminals. A teleport (a station for signal control and retransmission) would be created for this purpose, to connect each terminal via satellite to the internet.

The new government found GESAC at the start of its operations, with the teleport already installed, a contract signed with an Israeli company (Gilat), and an investment of more than R$20 million having already been made.

It was evident to the new government (and pure common sense) that this was a very expensive, poorly oriented project. After all, with the same financial and technical resources, it would have been possible to connect computer networks in public schools and community telecentres, through which citizens could be amply served, with the additional bonus of internet access as a whole, and not just access to government sites. With the money spent on a single brand name computer, it would have been possible to equip a small telecentre or public school with a local area network.

In consideration of the stage of the project, and the money already spent, our government decided to redirect it radically to connect small computer networks to the internet via satellite in public schools and community telecentres. It would also use part of the communication resources for specific Ministry of Defence projects.

GESAC’s reformulated contract (which should last 22 months, theoretically ending at the beginning of 2005), is for approximately four thousand Earth Stations (ESs). A recent endeavour by sectors of the federal government to use at least a thousand of these ESs to connect community telecentres has not yet been realised. Only a few telecentres have been set up and connected via GESAC (31 of them should become operational during January and February, according to the official announcement).

The large scale plan considered the establishment of approximately 1,200 community telecentres in areas with a high incidence of extreme poverty, within the framework of the Programa Fome Zero (Programme Zero Hunger – PFZ). All would lend themselves towards remote management by PFZ, and would function like community internet access centres, managed by the local community, and functioning like capacity building centres in the use of these technologies.

Despite President Lula mentioning in his speech (February 3) on PFZ’s anniversary, that this project of 1,200 telecentres had already been implemented, this is not the case, and in truth the project was cancelled by the previous administration of the Ministério Extraordinário de Segurança Alimentar (Extraordinary Ministry for Food Security – MESA).

However, the federal government apparently decided that GESAC, in its new form, should continue, and possibly expand, to reach more schools and community telecentres in regions without adequate local connectivity (more than 90% of municipal districts in the country, especially in areas like the Semi-Arid region, the Jequitinhonha Valley and others that are low on the Human Development Index (HDI).

There remains at least one question from the many to be answered by a national digital inclusion strategy: how many telecentres, in partnership with who, and exactly where?

Declaration of the Serviço de Comunicações Digitais (Digital Communications Service – SCD)

To create conditions so that businesses will offer internet access services in areas currently not covered by fixed telephone operations, and also to stimulate the development of access services that do not depend on the fixed telephone network (STFC, in Anatel’s jargon), SCD is proposing the establishment of eleven internet service providers with the contractual obligation to universalise means of access in all the regions of the country. Through SCD, resources of the Fundo de Universalização de Serviços de Telecomunicações (Fund for the Universalisation of Telecommunications Services – FUST) will be used to connect social interest activities in accordance with regulations already approved by the Fund.

In practice, these eleven businesses will be able to have a monopoly on these services (user authentication, data transport layers to the backbones) in their respective areas of operation until 2009. In the current declaration, there is nothing to prevent these businesses from monopolising other service layers: hosting, email, web services etc.

These businesses would be given the opportunity to consolidate their positions for four years. This would mean that any changes to these monopolies after 2009 would happen only with difficulty. As the declaration is currently under public consultation, objectives proposed by SCD are very long term in relation to the urgent needs of digital inclusion. The operation would only begin in 2006.

However, SCD will not clarify whether “parallel” initiatives, such as those taking place today (for example, wireless and/or fibre networks using the open spectrum from commercial services, or from a different local area or municipal district) will be stopped, or if it will continue to allow this space to be used – it is essential, for example, for local governments and communities to create their own physical networks for administrative and social services (example: Porto Alegre) and to negotiate better terms for business to consumer internet connections.

In other words: with SCD, will community networks be stopped? The hypothesis (optimistic) here is that they will not be, but this is not guaranteed by the current declaration.

Finally, it is hoped that Anatel will collaborate decisively to obligate the fixed telephone operators to implement "last mile" (the telephone line between the centre and the user) unbundling. This means enabling other digital communications service providers to set up their equipment in the telephone centres, and offer services through the already installed telephone lines (which is called “unbundling” in technical jargon).

In France, for example, whoever has a telephone line at home can choose between six broadband providers in many cities (known services such as ADSL, Velix, Speedy or BRTurbo in Brazil). In Brazil, there is only one ADSL service from the regional fixed telephone monopoly. This monopoly scenario leaves broadband dissemination in Brazil in the hands of a single business, which in practice means that this service is offered only in the main cities, at elevated prices. Today, the monthly cost of ADSL service in Brazil is on average double the price of that in France, if one compares services of the same speed.

Another legacy: FUST

SCD is currently being proposed as the way in which partially or totally subsidised connection of all public schools, health institutions, public and community libraries can be made viable. By linking FUST’s disbursement to SCD, and maintaining the Fund’s current restrictions, there is not, and there is not going to be a way to support community telecentre projects via FUST.

A proposal was in process in Congress to reformulate FUST’s regulations. The most recent version includes significant changes, such as the creation of a Management Council representative of the various sectors, and more flexibility in the use of resources (including support of community telecentres, which are not mentioned in the actual regulations). However, last year this process was suspended, and there is no indication of significant changes in the regulations in the short term.

Any change, in any case, will only be reflected in concrete disbursements in a minimum time-frame of two years, according to the least pessimistic estimates. Some believe that, because FUST has accumulated more than R$3 billion, this money could simply be absorbed by the Union’s general budget for those requirements considered as “most urgent”.

A state network infrastructure?

Recently, the federal government faced up to a potential “black hole” of hundreds of millions of dollars: the Eletronet fibre optic network. This is a large capacity fibre network (currently using less than 3% of its capacity), of more than 16 thousand kilometres, installed alongside high tension electrical transmission lines. The business responsible went bankrupt, leaving a large debt, and being one of BNDES’s creditors.

One of the alternatives is simply to let the network go to auction (which should happen in March 2004), thus losing much government and private initiative investment, and accepting the “black hole”. Another alternative, being seriously considered by the government, is for a national enterprise to absorb this network, which would mainly be used by the large federal government networks. If this happens, the government can consider keeping the channels for a national digital inclusion strategy.

The “bridge” between the backbone and the “last mile” has not yet been etablished. SCD could be a means of connecting the social infrastructure components already defined in FUST, but providing service to the general public through the community means of access is not yet defined, and in will only begin in some way in 2006.

Some conclusions

If the abovementioned hypotheses and facts are essentially correct, and with the indication that we can only hope to initiate a digital inclusion strategy in the country from 2006 (and only limited to the FUST components), it is essential to formulate a shorter term strategy using what we have and what we can construct without depending on these resources (which in some way at least ensures that they could spent in accordance with the current regulations).

In the current paradigm of network access, there are two alternatives: either each family has a computer at home, with a connection and contract through a provider, or there is a community access space in their community. The costs of acquisition and maintenance make the first alternative impossible for the large majority of Brazilian families. Thus, worldwide (even in more developed countries) community access solutions are being sought.

Until now, the most significant project of this type in Brazil has been the community telecentres programme promoted by the Prefecture of São Paulo. There are 107 telecentres serving over 300 thousand persons (approximately three thousand persons per telecentre) in the poorest areas of the municipal district. There is also the similar example of Porto Alegre, which currently has 20 telecentres.

The São Paulo project can be considered as a very important experiment in partnership between the public authorities and the community. The Prefecture provides resources for the installation and maintenance of the infrastructure (including the connection) and covers personnel costs (instructors, operators, auxiliary personnel). The telecentres exclusively use open source software, with a basic configuration of 20 machines per telecentre, and additional space for courses and community meetings.

Each telecentre, with twenty workstations and a server, is locally managed by its own community organisations, who are seeking to prioritise the stated needs of that community. As there is no legal protection guaranteeing the continuity of the resources (like a local digital inclusion fund or something similar) that would make the project immune to government changes, it is still too early to consider it a long term success. However, if it were possible to guarantee these structural resources, it would be a fundamental reference point for the rest of the country.

And if it were possible to replicate a project like this in the rest of the country? In the first place, the São Paulo project is not concluded – to reach the majority of the poor population in the municipal district in a significant way, it would be necessary for the project to reach from two to three million people out of a total population of 11 million. The project cannot be concluded only with connectivity resources –building maintenance, equipment, and human resources (instructors, operators, auxiliary personnel) also have to be considered.

According to the preliminary data of the 2001 census, approximately 52% of the Brazilian population lives in cities of 100 thousand inhabitants or more (that is 231 cities of a total of 5566 municipal districts).

Thinking big: extending the project throughout Brazil with the specific service scale (users per telecentre in the region of two or three thousand) of São Paulo today would mean thinking of a programme with approximately 15 thousand telecentres for 40 to 50 million people in the poorest areas. Interest in, and need for use would probably be greatest in the major cities (where there has already been contact, even indirectly, with these new technologies).

Thus, the first step would be the installation of seven to eight thousand telecentres in cities of 100 thousand inhabitants or more (noting that the cities with millions of inhabitants could have hundreds of telecentres, and the smaller ones could have only a few telecentres, always situated in areas with the lowest HDI).

In other areas, similar distribution is sought, so that the smaller cities would have at least one telecentre for each five to ten thousand people amongst the most poor.

This localisation model needs a great deal of refinement, with a very precise distribution methodology, based on PFZ data, HDI tables and other data, and above all in partnership with other sectors of society. As the actual implementation can take many forms (there are cities that can assume all the costs and others that would need significant support from the state or federal government), a national strategy needs to be extensively and intensely discussed, primarily with the participation of local governments and civil society representatives.

How to finance the installation and maintenance, on the one hand, and how to guarantee a connection on the other hand, for approximately 15 thousand telecentres? The total gross cost of installation, if we consider that each telecentre will be hosted in a space provided by a local entity, prefecture etc (but not calculating the cost of furniture acquisition), would be over R$400 million – it is very difficult to obtain this volume of resources without partnerships with state and local governments, or even with national private entities, or international agencies.

Apart from this, the operational cost has to be considered, which may be solved by partnerships with the community and the local authorities, combined with federal subsidies. Projects such as that in São Paulo (or in Porto Alegre) can lead the way, and inspire prefectures of major cities to become involved in this initiative.

On the connection side, given the above hypotheses, one solution would be to combine GESAC’s expansion with local initiatives (such as community networks, short and medium distance distribution via wireless networks etc). Instead of GESAC’s current four thousand ESs, we would have eight to ten thousand ESs, and in each case the optimal form of connection would be sought for the community telecentre, via GESAC in the majority of cases, at least whilst other forms of connectivity are not available in each locality.

In cases where there is a way to connect a community network to a national fibre backbone (such as Eletronet could become), an access method would be decided. A public policy effort could be made so that, in the larger cities, a metropolitan network managed by the local authorities could come into existence, also providing access to community telecentres. The example of Porto Alegre’s fibre network is illustrative.

To make a project such as this viable in the short term would mean accelerating the digital inclusion process in the country, without having to wait for “grand schemes” that will only mature in four to six years. Digital inclusion cannot wait that long.

There is much more that can be derived from an initiative like this, involving practically all sectors of government and society. But that is for other documents and discussions…..

*Carlos Afonso is the Director for Planning and Strategy of RITS, APC member in Brazil.

1O SCD is in public consultation until March 1. It includes public consultation 480 (Regulations), 493 (General Concession Plan) and 494 (General Plan for Universalisation Objectives). Public audiences are being held with the following:

Recife, 23/1; P. Alegre, 26/1; Rio de Janeiro,

28/1; S.Paulo, 30/1; B. Horizonte, 2/2; Brasília, 5/2; Manaus, 18/2.

Objections can be made through Anatel’s website: ( by 1/3, by post to 26/2 (SAUS, Quadra 6, bloco F, Biblioteca, Brasília DF, 70070-940), or by email to ( e fax (61) 312-2002.

Translation from the Portuguese original: APC

Author: —- (Carlos Afonso)
Source: Carlos Afonso
Date: 03/03/2004
Location: RIO DE JANEIRO, Brazil
Category: Democratising Communication

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