The Human Face of Telecommunication Development

Geneva, 12 March 2002 — Joel Araújo Carneiro runs a small business from a favela in Rio de Janeiro, Brazil. He picks up newspapers, bottles and glasses for recycling and reuse and provides cleaning services. One call on his cell phone and Joel will be over to salvage your recyclables or wash your car. Mobile phones have significantly transformed his life and improved his business.

The boom in cellular phones and the end of the telecommunications monopoly have made the long waiting lines for a traditional wire-based telephone in Brazil a thing of the past and lower prices have put phones in the hands of many of those who would not have been able to afford them ten years ago. Much of this record of success is a result of the country’s proactive telecommunications regulator.

Anatel has created and maintained an innovative regulatory mechanism, one that enables them to obtain the best prices and tariffs regardless of day, time and destination. The Anatel website, which receives thousands of hits each day, compares basic rates for domestic long-distance, international long-distance and mobile charges, based on information collected from operators. Initially, industry analysts doubted that Anatel could implement such a tariff information system, but as Brazil’s telecommunications sector has become increasingly competitive, providers themselves now constantly update the information, fueling the downward trend in telecommunication prices.

Anatel, who arrived somewhat late on the ‘reform’ scene, has been able to build on the positive experiences and avoid the pitfalls of countries that underwent the reform process earlier on. This experience has produced a number of best practices. Among them, members of Anatel’s board of directors have fixed 5-year terms, which ensures continuity of process and knowledge. New issues are assigned to these counselors randomly in order to give them broad expertise, while protecting their neutrality.

The Brazilian regulator has also outsourced many of its functions during times of intense regulatory activity, which has helped it keep up with a booming telecommunications market. It has also adopted a system of "reverse" auctions whereby proposals are submitted in writing at publicly attended sessions. The lowest 10% of the bidders are then asked to resubmit their bids within 8 days. This both speeds up the process and results in a more efficient and transparent method of contracting goods and services. Indeed, other agencies within the Brazilian government are now starting to use the reverse auction system in their own procurement practices, with expected savings of up to 20%.

Another exemplary system that Anatel has established is for monitoring and enforcement, on which it expends almost half of its financial and human resources. This has encouraged licensees to meet their obligations of coverage and quality of service. The agency has developed an enforcement manual that specifies a consistent method of investigating and penalizing violations. As well, Anatel is empowered to issue rules on the use of telecommunications services in the public and private sector, spectrum management, equipment utilization and on interconnection and interoperability of networks.

Television has proven to be an effective mechanism to raise awareness of Anatel’s significance. In 1999, the government unveiled a campaign called "Order and Progress in Brazilian Telecommunications". The objective of the campaign was to inform the public about the expansion and quality standards planned for telephony; to remind users of the obligations of operators and their right to demand compliance and to provide the public with statistics about increases in service expansion following privatization. The regulator also makes a practice of submitting all regulatory acts for comment through "public consultations." All interested parties have the right to respond as well as attend public hearings.

These public information policies are both creative and quite unique in the world of regulators. In most countries, the average citizen may not even know if their own country has a regulatory authority, or what it is called. Anatel has gone a long way in making citizens aware of its activities by emphasizing its actions and the subsequent benefits for the consumer. However, Anatel's concerns go beyond just increasing Brazilian citizens awareness of its existence. It has adopted Universal service as one of the pillars of the new Brazilian telecommunication model, believing that everyone in society regardless of their location or socio-economic status should have access to telecommunications.

One way Anatel is working toward universal access is through its Fund for the Universalization of Telecommunications Services (FUST). It supplies schools and hospitals in isolated areas with technology to support applications such as distance learning, teleconferencing and telemedicine. In addition, FUST must also provide for public access to digital information (i.e., the Internet) on favourable terms and conditions in libraries and educational establishments.

Renato Guerreiro, Anatel’s Chief, recently elaborated these best practices to other regulators at the ITU’s Global Symposium for Regulators. The annual event in Geneva, where more than 75 regulatory authorities convene to exchange and benchmark their experiences, has become one of the best venues to foster dialogue amongst regulators in a neutral setting. The exchange of views and experiences leads to development of best practice guidelines and models, which helps to create the secure climate necessary to increase investment in the sector. "In many ways, regulators are like a lighthouse shining a path of light into a safe and prosperous harbour," says Hamadoun Touré, Director of ITU’s Telecommunication Development Bureau.

The ITU is helping to light the way to these safe harbours by empowering new regulators and strengthening existing ones with ongoing advice and assistance. In addition to forums, it provides regulators a venue in cyberspace for dialogue on key issues of the day such as regulatory independence, transparency and fairness, interconnection between competing operators and spectrum management. The Global Regulators’ Exchange (G-REX), an online forum for regulators and policy-makers, has been well received by its participants with some, such as OFCOM Switzerland, IDA Singapore and ANRT Morocco lending their expertise by moderating some of the discussions on-line. As Audrey Baudrier of the French regulatory body, Autorité de Régulation des Télécommunications (ART), sees it G-REX "promises to reduce communication costs, create regulatory communities of interest and provide international visibility for the regulator."

Regulatory reform may still be an abstract concept for small business people, whether they operate their enterprises from a modern shopping centre or like Jose Arújo Carneiro in the slums of Brazil. What matters most to them is the bottom line; so as long as telecommunication costs are fair and the range of services and their accessibility continue to improve, they will no doubt want reform to continue.

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