Alternatives of Public Policies to Deploy Universal Fixed Broadband Infrastructure: Analysis of the Options Considered in Brazil

Abstract

Almost twelve years ago, telecommunications market in Brazil went through deregulation and privatization processes. Since then, it has been operated solely by private-owned companies. This model, combined with lack of directive policies and absence of real competition, led to high price and low density of all telecommunications services, a scenario where broadband access is a particular case. This paper examines the three options considered in the country to face these problems. First, a state-owned company, using existing optical fibers from other utilities companies, is supposed to offer broadband access directly to both consumer and carrier segments, competing with existing providers. It would assure the infrastructure to be available at poor and remote areas and would also attract local providers, whose investment would reduce the need for public resources, helping government to focus on the most vulnerable population. Alternatively, a public-private partnership (PPP), transferring this infrastructure to a new or existing private competitor, would promote competition and, therefore, lower prices and improve broadband density. The final option, supported mainly by private providers, is to maintain the existing private model: it may be possible to obtain universal access with funds provided by public resources and prices could drop if taxes were cut.