Nearshore Americas

Brazil’s Lulu Outclasses the U.S. in Broadband Policy

SOURCE: HuffingtonPost

With election season underway president Lula’s program expanding Brazil’s Internet infrastructure has gained credibility across the political spectrum. Regardless of who wins the presidency in October the program helps government and the private sector work faster and smarter. Grabbing first mover advantage among G-20 nations, Big Broadband Brazil is providing high speed backbone for all types of business processes, creating jobs, and securing Brazil’s future as an economic and agricultural power.

Lula’s strategy, which has seen Brazil’s internet population increase from 8 million to 60 million since taking office in 2003, was designed to attract international capital to complement local business and state investments. But it isn’t linked to Davos-style globalism, which seeks to roll back the influence of the state and the social contracts between governments and people in the name of “free markets” and the US notion of “Internet democracy.” Regardless of how much good advocates say this model offers, it’s the same laissez-faire paradigm that caused the current economic crisis .

Lula’s plan is working because it features the nation-state as the dealmaker, not the lap dog the Davos crowd prefers. Brazil respects state and free market players, acknowledges their differences and creates space for them to co-exist and compete.

On the broadband front, the government of Brazil plans to generate public and private investments totaling $14.9 billion and add upwards of 30 million fixed lines to the national Internet infrastructure by 2014.

Carlos Slim of Mexico, who already controls Claro Telecom in Brazil, is considering a $10 billion investment in the mobile market that could help the government reach its goal of generating 60 million new connections in the next four years.

Brazil’s strategic ally in Europe, France, is rolling out a 4.5 billion Euro bond issue to finance the first big upgrade in its national broadband infrastructure. Private investors and broadband providers are expected to put up matching funds, with the goal of providing 70 percent of the French internet population with access to 100 mbps by 2019. Currently 94% are ADSL subscribers.

Lula’s vision is having a game-changing effect, with Brazil hosting conferences headlining major players who formerly preferred Northern Hemisphere venues to promote and discuss investing in the future of the Web.

The Financial Times of London and Valor Economica, a major Brazilian business newspaper, are hosting an infrastructure summit May 10-11 Rio. And US internet consulting firm Gartner Research is featuring Brasscom, the Brazilian Association of Internet and Communication Companies as part of its 2010 Summit in Sao Paulo and Rio June 8-10 that will discuss Brazil’s expanding role as a provider of Internet back office operations in the Americas.

Brasscom has also taken the lead reaching out to counterpart national information technology (IT) associations in Russia (Russoft) and China (CCIIP) and companies like Intel and SAP to coordinate planning and development of new infrastructure, software and education initiatives. The resulting baseline will provide a common focus for the BRIC nations in the new knowledge based economy, promote job creation and ramp up best approaches for servicing the projected billion users in the world’s largest mobile market.

In Washington meanwhile, cognitive dissonance between Team Obama, major internet industry players, financiers and K Street lobbyists makes crafting a national internet policy problematic.

A recently released 360 page FCC report on bandwidth to support the growing knowledge economy has less to do with projecting the US leadership than created the Internet than with supporting the online entertainment industry that helped put president Obama in office. Slate Magazine recently characterized the US broadband network as being “crummy.”

China is making tremendous investment in its broadband infrastructure. But the culture of complaint fostered by Google’s Cold War-style brinkmanship overlooks the fact that China needs to weave Chinese style “Internet democracy” into its social fabric at its its own pace in order to avoid domestic political developments that would not bode well for the United States.

This classic debate between state power and US-based globalism reveals that the speed at which China can monetize the potential of the world’s largest digital economy will never be fast enough for Google’s Eric Schmidt and others who want to convert their prospective China footprints into a bankable asset that could loosen up money in today’s tight credit market.

Government infrastructures historically have been tagged by international media for setting prices in telecom and internet markets. But Lula, who globalist pundits and NGOs chide for his Workers Party “leftist” orientation, went outside the box and brought competition into the mix. While Lula’s government hoped for the best, the result has been rate creep by private telecoms and internet service providers that has burned Brazilian consumers.

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A study by Anatel, the national telecommunications oversight agency, has found that private broadband operators have been manipulating prices and not offering speeds as advertised. Brazil’s Supreme Court recently handed down a decision that in the end will likely penalize those companies. And Bloomberg is reporting that the Lula government is revitalizing state-controlled Telbras to organize an $11 billion public-private partnership and launch a broadband plan that will cost Brazilians between about $17 (30 Reals) per month, less than half of what most pay now.

On the eve of the dot com bubble the US represented 66 percent of the world internet population. Today, it represents just 15 percent and growth in North America is flat. In South America, internet growth is vibrant and Big Bandwidth Brazil is a reminder of why strong government oversight is necessary to mediate the interests of globalist telecoms and internet industries.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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