Brazilian government accused of failing to utilise telecoms fund

18 Oct 2006

BNamericas, citing a report in the newspaper Folha de S. Paulo, says that by the end of 2005 the Brazilian government had only allocated 9.7% of the BRL17.5 billion (USD8.1 billion) it collected through its various telecoms funds in the period 2001-05. Under Brazilian law the country set up three funds – Fistel, Fust and Funttel – to collect money for projects to boost access to telecoms services and the internet. However, two successive administrations have been accused of failing to use the resources properly and moreover, have allegedly redirected large sums of money to ‘unrelated initiatives’, says the paper.

Brazil’s telecoms fund for auditing activities (Fistel), which was set up to support the national regulator Anatel, received BRL2.5 billion in 2005 from cablecos and telecoms operators last year, but only BRL231 million of the regulator’s BRL500 million budget request for the year actually filtered through. The universal access fund (Fust) is intended to finance the deployment of telecoms infrastructure for low-income communities and internet access to public institutions, but has seen numerous projects bogged down or mired by red tape. The fund receives 1% of gross revenues from fixed line operators and is estimated to have collected BRL5 billion since it began in 2001. Although the government recently outlined plans to invest BRL755 million of Fust monies by 2010 in a digital inclusion programme for low-income communities and BRL7 million to supply telecoms services to schools for the disabled, questions remain over where the other money has gone.

Brazil’s third telecoms fund (Funttel) is a technology development account that receives 0.5% of operators’ gross revenues and is legally bound to finance research, training and to boost the competitiveness of SMEs in the sector. The report says Funttel has fared better than its counterparts in the period under review, dispersing BRL540 million from over BRL1 billion collected in 2001-05 on projects such as digital TV services.