Environmental and Social Management Framework for the Costa Rica Telecommunications Sector Modernization Project
Project description 2.1Background
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- 2.2Objective
- 2.3Key Development Issues and Rationale for World Bank Involvement
- 2.3.1Proposed World Bank Objective(s)
- 2.3.2Preliminary description of the World Bank Project Components
2Project description2.1BackgroundThe telecommunications sector in Costa Rica is currently at a turning point. The government recognizes that in spite of the successes of the past, the accelerated pace of technological development and of markets requires new policies so that the country remains competitive. Within this context, the government of Costa Rica (GoCR) has developed an explicit national telecommunications sector modernization policy, as one of the pillars in its effort to increase the global competitiveness of the country. The GoCR’s telecommunications sector modernization policy is based on principles that are deeply rooted in the national tradition, in particular: (i) gradual, selective and regulated liberalization without privatization; and (ii) benefit to the user in compliance with the social objectives of universality and solidarity. Against this background, and under the heading of the social objective of universality and solidarity, the general telecommunications law envisages the creation of a Universal Service Fund for Telecommunications, FONATEL, one of whose objectives will be to promote investments in the deployment of telecommunications networks and provision of services to rural areas. The initial round of FONATEL projects will be financed with the support of a World Bank project. In order to analyze any environmental or social impact that these investments may have, the GoCR jointly with the World Bank wishes to conduct an environmental assessment of the telecommunications sector in Costa Rica, which will serve as guide for the design and execution of FONATEL projects, in particular those to be financed with the support of the World Bank. 2.2ObjectiveThe general objective of the current study is to develop a sectoral environmental assessment of the Costa Rican telecommunications sector, as well as to outline options for an environmental management plan, which will strengthen the environmental management of the telecommunications sector in Costa Rica and will provide guidelines for the selection of sites for the construction activities related to the implementation of the proposed World Bank Telecommunications Sector Modernization Project, particularly with regards to the rural telecommunications component, and for the design of mitigation measures of environmental impacts. 2.3Key Development Issues and Rationale for World Bank InvolvementThe GoCR has made the modernization and opening of the telecommunications sector to competition an explicit national policy, as one of the pillars of the country’s efforts to increase its global competitiveness. The state-owned electricity institute (ICE) currently provides both telecommunications and electricity services within Costa Rica on an almost exclusive basis, as only niche segments of the market (paging and trunking) are open to private participation and competition. ARESEP, the multi-services regulatory authority, has traditionally been limited to regulating ICE’s telecommunications tariffs and service quality as a monopoly operator, but the new administration wishes to transform the agency into a modern regulatory authority for the sector a whole. At the same time, the government wishes to establish the policy making function firmly within the Executive, and the Ministry designated to that effect is the Ministry of the Environment and Energy. The radio spectrum management and monitoring office (Dirección Nacional de Control de Radio – DNCR), housed for historical reasons in the Ministry of Interior (Gobernación), has extremely limited human, technical and financial resources. These functions will be transferred to ARESEP. The basic indicators for the telecommunications sector in Costa Rica reveal high penetration and an overall level of development beyond what could be expected given Costa Rica’s other macroeconomic indicators, for which the country must be commended. Costa Rica displays a strong performance in terms of fixed line teledensity, which stands today at about 32.6%, up from 23.5% in 2000, as a result of ICE’s strategy to boost fixed line density. Nevertheless, with regards to mobile telephony and high speed Internet services, the country’s level of development is lower than its peers. Despite increasing its number of mobile lines from 3 per 100 inhabitants in 1998 to 26.5 by September 2005, Costa Rica still lags behind other comparable countries, such as Chile (70.7), Ireland (100.5) and even Panama (48.8). Moreover, a simple regression analysis of infrastructure outcomes and GDP per capita shows that Costa Rica’s fixed teledensity was 19.3 percent higher than expected for a country with Costa Rica’s GDP per capita, but that mobile teledensity was 60.8 percent lower. Costa Rica has experienced a significant increase in the use of Internet and personal computers over the last decade, performing better than comparator countries. In 2004, Costa Rica had the highest density in the use of Internet among regional economies (23.5 users per 100 inhabitants, which represent almost a tenfold increase since 1998). However, the availability in Costa Rica of more advanced services such as broadband Internet is extremely limited, and well below that in peer economies. In 2004 there were only 2.3 broadband subscribers per every 1,000 Costa Ricans. This is an extremely low level of broadband penetration, compared to countries such as Chile (22 per 1000 inhabitants), Lithuania (13.7 per 1000 inhabitants), or S. Korea, with an impressive rate of 233 subscribers per 1000 inhabitants. In addition, a number of important issues such as quality of service, delay in technological and market innovation (pre-paid mobile is only being introduced in late 2008), the slow pace of investment in the sector, and the uncertainty in the efficient allocation of scarce resources, notably spectrum, reveal the need for a shift in the current regulatory environment towards a more competitive one. Progress has already been made in this front. A new General Telecommunications Law has been approved, and a Public Telecom Institutions Modernization Law is expected to also be approved shortly. As part of this process, a detailed policy options report was produced together with a diagnostic of the regulatory authority, and a number of key regulatory decrees are also being drafted. As a consequence of advisory work conducted by the World Bank, the GoCR requested the inclusion of this proposed operation in the Country Assistance Strategy (CAS). 2.3.1Proposed World Bank Objective(s)The government’s strategic objective for the sector is to ensure that the widest range of quality modern telecommunications and Information and Communication Technology (ICT) services are universally accessible and affordable throughout the country, especially for the poorest Costa Ricans who are at risk of being left behind, as a key contribution to Costa Rica’s competitiveness and poverty alleviation objectives. The project’s development objective is to contribute to the universal accessibility of a wide range of quality modern telecommunications services provided by multiple service providers in a well-regulated competitive environment, contributing to economic growth, competitiveness and social cohesion. This will be achieved through: (i) the modernization of the legal, regulatory and institutional framework, (ii) the introduction of fair competition and private participation, (iii) the modernization of ICE, and (iv) the promotion of investment in the provision of service to rural and isolated poor areas and vulnerable groups. 2.3.2Preliminary description of the World Bank Project ComponentsThe proposed project has four main interrelated components aimed at achieving the project development objective. The first component will be aimed at guaranteeing that the benefits of competition reach rural areas and low-income users, through the design of the universal service fund and implementation of universal service projects. The majority of the investments through this component will be dedicated to competitively leveraging investment to the deployment of broadband services for vulnerable groups and disadvantaged regions, based on poverty indicators, among others, and for specific social needs, such as for schools, hospitals and other public social programs. The second component will be aimed at institutional strengthening of the regulatory authority, and the creation within it of a specialized entity (SUTEL) in charge of telecommunications regulation. This will include support in improving the efficiency of spectrum use, number portability and related regulations, as well specialized equipment for radio spectrum management and monitoring. In addition, this component will also provide support to SUTEL in the implementation of a market opening strategy. The third component is aimed at supporting the Ministry in developing the legal and regulatory framework for a modern telecommunications sector. This component will also support developing the institutional capacity of the Ministry itself, through the creation of a telecommunications policy unit, to provide policy guidance to the regulatory authority, particularly with regards to the market opening and universal service programs. The fourth component will include targeted support for the incumbent, ICE, in its strategic repositioning and transformation into a modern operator, capable of performing well and contributing to the development of a healthy competitive environment. The areas most likely to benefit from the investments are rural areas, where telecommunication networks are least developed, i.e. provinces of Alajuela, Heredia, Limon and the South Pacific Coast. The project mainly aims at developing broadband access and mobile phone network in these regions. The implementing agencies of the project will be the Ministry of Environment and Energy, as well as ARESEP. Some support to project management may be provided through capacity building activities for both the Ministry and ARESEP. In addition, it may be necessary to support the implementing agencies with the recruitment of procurement and/or financial management specialists to assist on project implementation issues. Directory: curated curated -> Concept stage curated -> Concept stage curated -> Republic of Côte d'Ivoire Urbanization Review curated -> Report No: aus11011 Central America curated -> Report No. 94474-pk fiscal Disaster Risk Assessment Options for Consideration curated -> Environment Impact Assessment For Jiangxi Shangrao Sanqingshan Airport Beijing Guohuantiandi Environmental Technology Development Center. Ltd. 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