Countries around the world are seeking to spur broadband development, recognizing direct benefits in the form of economic growth, national competitiveness and improvements in social and cultural development. Several studies highlight the potential economic impact of broadband. The World Bank found every 10 percentage point increase in broadband penetration accelerates economic growth by 1.38 percentage points in low- and middle-income countries. A McKinsey & Company study yielded similar results, showing a 10 percent increase in broadband household penetration delivers a GDP boost ranging from 0.1 percent to 1.4 percent. Booz & Company found 10 percent higher broadband penetration in a specific year is correlated to 1.5 percent greater labor productivity growth over the following five years.
By late 2009 wireline and wireless broadband subscriptions crossed 1 billion globally, but most connections are in the developed world, with the developing world far behind. Fortunately that is starting to change. Brazil is executing on an ambitious Plan Nacional de Banda Larga (PNBL or National Broadband Plan) to bridge the digital divide and meet the following goals:
- reduce social and regional inequality,
- create jobs and income,
- improve government services,
- increase Brazil’s overall competitive position.
An action plan was created for PNBL to address major challenges that had been identified:
- Broadband in Brazil was priced far higher as a percentage of per capita income as compared to other developing countries. Regulations and incentives were created to increase competition and lower prices. In fact taxes on items such as modems were lowered to help reduce costs.
- Many regions of Brazil were underserved with broadband services and connection speeds were far below world averages in most of the country. A plan was developed to build a nationwide fiber optic network and Telebras was selected to construct it.
As part of the plan, policies for technology development were proposed to lay the groundwork for a national industry in telecoms equipment. The Brazilian Development Bank (BNDES) also provided financing incentives for digital cities.
The PNBL is already showing results. The first city, San Antonio, in the Goias state in central Brazil, has been connected to Telebras’ high speed backbone. In exchange for high speed connectivity, local providers offer reduced rate broadband or provision a higher speed connection without increasing the cost. More than 300 more municipalities are targeted for connection by the end of 2011, and more than 4,200 by 2014. The president has set a goal of increasing broadband penetration from 27% of households currently, to 70% of households by 2014. In all more than $10 billion will be spend from both federal and private sources.
Nominum was proud to play a role in the Brazilian national network. Starting with early involvement in the planning phase, followed by intensive consultation throughout the design and implementation, the new national network was contructed with a state of the art DNS to match the high speed fiber backbone. Advanced services will help protect Internet users from malware and other threats and because they are based in the network, end users do not have to install or maintain specialized client software.