After many discussions with private telecommunication companies, government institutions, civil society and LAN-house owners, the federal government of Brazil officially launched the National Broadband Plan on May 5. Between 2010 and 2014, an investment of R$ 15 billion Reais (about $8.5 billion USD) will bring broadband to 4,600 Brazilian municipalities and provide internet to 75% of Brazilian households.

The plan will reactivate the dormant optical fiber network from an old state company called Eletronet. In addition, the plan breathes life into Telebrás, a state telecommunications company that’s been inactive since the telecom privatizations in the 1990s. Telebrás will be the ‘manager’ of the project, but it won’t be a 100% state service; the government wants private companies to play a role similar to resellers, providing the service to the end user. Telebrás will be responsible for implementing the communication network of the federal public administration and provide support for broadband to universities, research centers, schools, hospitals and other public institutions.

The largest telecom companies who currently ‘own’ the market are concerned about the competition that will be generated by the plan. But, they only have themselves to blame. When Brazil privatized all of its telephone companies in the 1990s, the goal was to grow the market, make services available to more people and provide new & innovative technology products.

The market did expand and more people had access to telephones and cellphones. But, customer satisfaction is low and the services are expensive. But the real problem is that Brazilians pay 10 times more for broadband internet access than developed countries. Only 20% of households in Brazil have broadband. The private companies have no interest in offering broadband services to the poorer regions of Brazil, in the north/northeast.

In the spirit of Brazil’s current commitment to digital inclusion, the federal government decided that the free market would never have the incentive to provide internet throughout the country and the National Broadband Plan was born. Through the government plan, Brazilians will pay between R$15 ($8.50 USD) and R$35 ($19.50 USD) to get speeds between 512kb/s - 784kb/s. Currently, the private plans cost, on average, R$50 ($28 USD) for 256kb/s and high-speed plans cost over R$100 ($57 USD).

In 2010, the government will start building the backbones of the network in the Federal District, Rio de Janeiro, Minas Gerais, São Paulo, Ceará, Sergipe, Bahia, Alagoas and Pernambuco.

Full broadband service will be offered this year to 100 cities. Exactly which cities will get the service this year is still not known but Cesar Alvares, coordinator of the federal Digital Inclusion Program, says that “[The list of cities] are diverse. Cities with a big population and cities with small populations, both, from the rural and urban areas, should be addressed.”

The goal is to offer broadband in 25 states and the Federal District by 2014. This leaves out the state of Roraima because the optical fiber doesn’t reach there but the government is starting a study to figure out how to provide services there.