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New Models for Universal Access to Telecommunications Services in Latin America

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New Models for Universal Access to Telecommunications Services in Latin America 40829 NEW MODELS FOR UNIVERSAL ACCESS TO TELECOMMUNICATIONS SERVICES Public Disclosure Authorized IN LATIN AMERICA PETER A. STERN, DAVID N. TOWNSEND FULL REPORT Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized THE WORLD BANK NEW MODELS FOR UNIVERSAL ACCESS TO TELECOMMUNICATIONS SERVICES IN LATIN AMERICA: LESSONS FROM THE PAST AND RECOMMENDATIONS FOR A NEW GENERATION OF UNIVERSAL ACCESS PROGRAMS FOR THE 21ST CENTURY FULL REPORT FORUM OF LATIN AMERICAN TELECOMMUNICATIONS REGULATORS Ceferino Alberto Namuncurá President, REGULATEL 2006-2007 Auditor, CNC Argentina ---------------------------------------- COMITE DE GESTION Ceferino Alberto Namuncurá Auditor, CNC Argentina Oscar Stuardo Chinchilla Superintendent, SIT Guatemala Héctor Guillermo Osuna Jaime President, COFETEL Mexico José Rafael Vargas President, INDOTEL, Secretary of State Dominican Republic Pedro Jaime Ziller Adviser, ANATEL Brazil Guillermo Thornberry Villarán President, OSIPTEL Peru -------------------------------- Gustavo Peña-Quiñones Secretary General All rights of publication of the report and related document in any language are reserved. No part of this report or related document can be reproduced, recorded or stored by any means or transmitted in any form or process, be it in electronic, mechanical, magnetic or any other form without the express, written permission obtained from the organizations who initiated and financed the study. The views and information presented in this report are the views of the authors and do not necessarily represent the views, opinions, conclusions of findings of the Forum of Latin American Telecommunications Regulators (Regulatel), the World Bank through its trust funds PPIAF and GPOBA, the European Commission and the Economic Commission for Latin America (ECLAC). Table of Contents Executive Summary I. INTRODUCTION, p. 1 I.1 Background and objectives, p. 1 I.2 Project team and work program, p. 2 II. TELECOMMUNICATIONS IN LATIN AMERICA, p. 5 II.1 Introduction, p. 5 II.2 Privatization, p. 5 II.3 Introduction of competition, p. 7 II.4 Regulators, p. 8 III. ANALYTICAL FRAMEWORK, p. 13 III.1 Objectives and definitions, p. 13 III.2 Policy and program analysis, p. 16 III.3 “Market gap” and “access gap” concepts, p. 17 III.4 Regulatel gaps model, p. 21 IV. REGULATEL GAPS MODEL RESULTS AND ANALYSIS, p. 24 IV.1 Overview, p. 24 IV.2 “Macro” comparative analysis of market efficiency and access gaps, p. 25 IV.2.1 Cellular mobile telephone service, p. 25 IV.2.2 Internet and telecenters, p. 28 IV.2.3 Broadband, p. 30 IV.3 “Micro” detail analysis of selected country results, p. 32 IV.3.1 Brazil, p. 33 IV.3.2 Bolivia, p. 35 IV.3.3 Colombia, p. 36 IV.3.4 Mexico, p. 38 IV.3.5 Chile, p. 40 IV.4 Analysis of findings and implications for policy-makers, p. 40 V. UNIVERSAL ACCESS PROGRAMS IN LATIN AMERICA, p. 43 V.1 Introduction, p. 43 V.2 Market liberalization and regulatory initiatives, p. 52 V.2.1 Overview, p. 52 V.2.2 Experiences with universal access obligations, p. 53 Table of Contents V.3 Universal access funds, p. 57 V.3.1 Introduction, p. 57 V.3.2 Characteristics of universal access programs and funds, p. 57 V.4 Other financing initiatives, p. 68 V.5 State controlled mandates, p. 72 VI. UNIVERSAL ACCESS PROGRAMS: RESULTS ACHIEVED, BEST PRACTICES AND CRITICAL EVALUATION, p. 76 VI.1 Introduction, p. 76 VI.2 Market liberalization and regulatory initiatives, p. 77 VI.2.1 Introduction, p. 77 VI.2.2 Results achieved, p. 77 VI.2.3 What has worked well, and why? P. 82 VI.2.4 Main problems encountered and responses, p. 83 VI.2.5 Lessons learned and the way forward, p. 84 VI.3 Universal access programs and funds, p. 85 VI.3.1 Introduction, p. 85 VI.3.2 Results achieved, p. 85 VI.3.3 What has worked well, and why? P. 90 VI.3.4 Difficulties, problems encountered and responses, p. 91 VI.3.5 Lessons learned: Best practices in universal access fund programs, p. 105 VI.3.6 Recommended action: Universal access programs and funds, p. 107 VI.4 Other financing initiatives, p. 109 VI.4.1 Introduction, p. 109 VI.4.2 Results achieved, p. 109 VI.4.3 What has worked well, and why? P. 111 VI.4.4 Main problems encountered and responses, p. 112 VI.4.5 Lessons learned and the way forward, p. 113 VI.4.6 Recommendations: Other financing initiatives, p. 115 VI.5 State controlled mandates, p.116 VI.5.1 Introduction, p. 116 VI.5.2 Results achieved, p. 116 VI.5.3 What has worked well, and why? p. 118 VI.5.4 Lessons learned and the way forward, p. 119 VI.6 Operators and manufacturers, p. 121 VI.6.1 Observations of operators and manufacturers, p. 121 VI.6.2 Recommendations based on observations of operators and manufacturers, p. 122 Table of Contents VI.7 Conclusions, p. 122 VII. INNOVATIVE STRATEGIES, BEST PRACTICES AND NEW MODELS FOR ACHIEVING UNIVERSAL ACCESS, p. 131 VII.1 Introduction, p. 131 VII.2 Transmission technologies for local access and transport, p. 131 VII.2.1 Introduction, p. 131 VII.2.2 The most promising wireless technologies for local access, p. 133 VII.2.3 Applications in rural and underserved areas, p. 139 VII.2.4 Deployment of broadband, p 141 VII.2.5 Conclusions, p. 143 VII.2.6 Recommendations: transmission technologies for local access, p. 144 VII.3 Financing innovations, p. 144 VII.3.1 Introduction, p. 144 VII.3.2 Micro-credit, p. 145 VII.3.3 Enablis: Filling the gap between micro-credit and venture capital, p. 146 VII.3.4 Recommendations: Financing innovations, p. 148 VII.4 Innovative business and commercial practices, p. 149 VII.4.1 Introduction, p. 149 VII.4.2 Business practices, commercial and service delivery innovations, p. 149 VII.4.3 Service offerings, p. 153 VII.4.4 Marketing, p. 154 VII.4.5 Management practices, p. 155 VII.4.6 Partnership arrangements, p. 155 VII.4.7 Procurement, p. 156 VII.4.8 Recommendations: Business practices, commercial, service delivery and partnership innovations, p. 157 VII.5 Regulatory policies and strategies for universal access, p. 158 VII.5.1 Introduction, p. 158 VII.5.2 Spectrum use policies: Encouraging the development of license-exempt technologies, p. 158 VII.5.3 Voice-over-Internet Protocol (VoIP), p. 159 VII.5.4 Licensing, p. 161 VII.5.5 Quality- of-service and standards policies, p. 162 VII.5.6 Tariff and interconnection regulations, p.162 VII.5.7 Facilities and infrastructure sharing, p. 164 VII.5.8 Recommendations: Regulatory policies and strategies for universal access, p. 165 VII.6 Conclusions: Innovative strategies and best practices for universal access, p. 166 Table of Contents VII.7 New models and pilots for universal access in Latin America, p. 172 VII.7.1 Introduction, p. 172 VII.7.2 Community telecommunications cooperative: The Agrarian Information System (SIA) Project in the Chancay–Huaral Valley, Peru, p. 172 VII.7.3 Community telecommunications operator: The ACLO/IICD Sistema de Información Campesina–Indígena Project, Sopachuy, Department of Chuquisaca, Bolivia, p. 172 VII.7.4 Privately initiated and operated regional telecommunications company: The Televias Huarochiri Pilot Project in Huarochiri Province, Peru, p. 173 VII.7.5 Televias Puyhuan Project in the Department of Junin, Peru, p. 174 VII.7.6 Small Commercially Operated Regional Network: The QINIQ Broadband Network in Nunavut Territory, Canada, p. 175 VII.7.7 Privately initiated and operated local telecommunications company: Ruralfone in the State of Ceara, Brazil, p. 176 VII.7.8 Broadband access systems integrator: OmniGlobe Network Model, p. 178 VII.7.9 Initiatives of incumbents and large operators: Telefonica in Peru and Brazil, p.179 VII.7.10 Telecenter models, p. 180 VII.7.11 Conclusions: New models and pilots, p.182 VII.7.12 Recommendations: New models and pilots, p. 182 VIII. BEYOND THE HORIZON: RECOMMENDATIONS FOR ACCELERATING UNIVERSAL ACCESS IN LATIN AMERICA, p.186 VIII.1 Introduction, p. 186 VIII.2 New vision, p.186 VIII.3 What is needed? p. 189 VIII.4 High-level planning and coordination, p. 190 VIII.5 Further unleashing of the market, p. 191 VIII.5.1 Ensure technological neutrality, p.192 VIII.5.2 Reform and expand frequency access and small operator licensing, p. 192 VIII.5.3 Facilitate dissemination of new and adapted technologies, p. 192 VIII.5.4 Further streamlining and reform of regulatory processes, 193 VIII.6 The new mandate of the Universal Communication Fund, p. 194 VIII.7 Role of Regulatel, p. 198 Bibliography Annexes 1. Summary of Recommendations, p. 201 2. Analytical Framework and Gaps Model, p. 214 3. New Models and Project Pilots for Universal Access in Regulatel Member Countries, p. 224 4. Telecenter Models, p. 277 5. Technological Overview: Wireline and Wireless Broadband Access Technologies, p. 286 6. Traditional Financing Instruments for ICT Projects, p. 296 7. Regulatory Dispositions of Interest, p. 299 8. Comparison of Monthly Charges for Broadband Internet Access, p. 305 Table of Contents Figures III.1 The Gaps Model, p. 17 IV.1 Gaps Model results for cellular telephone access, p. 26 IV.2 Estimated cellular service penetration in Latin America, p. 26 IV.3 Gaps Model results for Internet/telecenter access, p. 29 IV.4 Gaps Model results for broadband access, p. 32 V.1 Servicio Nacional de Telecomunicaciones Rurales (SENATER), HF radio station in Potosi, Bolivia, p. 68 V.2 Customer making a booking at the SENATER, HF radio station in Potosi, Bolivia, p. 69 VI.1 Fixed line penetration (1990, 1996, 2005), p. 75 VI.2 Mobile penetration (1996, 2000, 2005), p. 75 VI.3 Latin America: Combined annual growth rate (CAGR) for cellular mobile between 1996 and 2005, p.
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