[WSIS CS-Plenary] report on TFFM meeting 29 November

[Rik Panganiban]

Task Force on Financing Mechanisms
29 November 2004
UNDP Headquarters, New York, USA
Unofficial Report on Proceedings
Rik Panganiban, Conference of NGOs


INTRODUCTION
The Task Force on Financing Mechanisms had its final meeting at UNDP 
headquarters on 29 November 2004.  The following is an unofficial 
report on the proceedings and should not be considered minutes or an 
official record of the meeting or its outcomes.

The morning meeting began with a welcome by the Administrator of UNDP 
Mr. Mark Malloch Brown, followed by reports from the Secretariat on the 
draft report, from Charles Geiger on the WSIS process, and from 
Sarbuland Khan on the recent UN ICT Task Force meeting.  The afternoon 
was spent discussing the substance of the report, particularly “access” 
and “content and applications” issues.  The meeting concluded with 
discussing the process forward for the Task Force.


WSIS PROCESS
Charles Geiger of the WSIS secretariat gave a “state of play” report on 
the WSIS.  He noted that the Group of Friends of the Chair would 
ideally like to receive even a draft of the report of the TFFM for its 
meeting from 16-17 December.  He clarified the status of the Digital 
Solidarity Fund as not being created “by” the WSIS but created “in 
conjunction” with the Summit, since it emerged  from the parallel WSIS 
Cities Summit which occurred in Lyon in December 2003.

Mr. Geiger also noted that Prepcom II in February would decide on the 
format and structure of the Tunis Summit.  In general he felt that the 
Tunisian host country is planning on a similar format to the Geneva 
Summit, with a main official summit and several parallel or side-events 
happening around the same time.  However he noted that because of 
security considerations, all participants at the side events would have 
to have badges, i.e. some form of accreditation, to attend.


DISCUSSION OF REPORT OF TFFM
The text of the draft report was presented to the Task Force by the 
UNDP secretariat, including a set of “proposed findings.”  The final 
report will have to be transmitted to the UN Secretary General by 
mid-December in order to give his office time to transmit it to the 
WSIS secretariat by the end of December.  So this meeting was the last 
time the entire Task Force was going to be able to comment on the 
report as a group, although written submissions would still be accepted 
into early December.

The Task Force agreed that the report would not have “recommendations” 
since that is beyond the mandate of the Task Force but would issue 
“findings” and options for governments to consider in the official WSIS 
process.  Among the main findings are:

•	Since the 1990’s, the private sector has dominated ICT finance and 
has produced immense sector growth in the developing world
•	Attracting investment in ICT depends upon an enabling policy 
environment ensuring open entry, fair competition and market-oriented 
regulation
•	MDBs and international donors have reduced direct financing of ICT 
infrastructure, shifting resources to policy reforms and mainstream 
ICTD initiatives
•	Since 2000 FDI has decreased significantly
•	Future ICT investment in developing countries will depend on further 
policy reforms, domestic financial mechanisms and multi-stakeholder 
partnerships
•	Key segments of ICT facilities in developing countries will remain 
unattractive to pure private sector investment
•	Regional cooperation and PPP can be critical for addressing 
infrastructure gaps
•	Universal Service / Access Fund mechanisms are emerging as a global 
standard practice to reduce access gaps
•	Coordination of the myriad initiatives being financed by various 
donors is lacking
•	Current financing of capacity building in public sector is lacking


ACCESS AND FINANCING ISSUES
There was a discussion in the afternoon access to ICT infrastructure as 
a financing issue.  One member noted that the goal was to capitalize on 
the rapid growth of ICTs to ensure more equitable distribution of those 
technologies, geographically and across social strata.  Another member 
noted that access does not spread evenly, but usually begins in large 
cities and slowly expands out to smaller and smaller communities.

One member noted that the rapid growth in GSM in the developing world 
needed to examined closely to see what lessons can be learned for other 
ICTs.  One answer is that the infrastructure costs for GSM are less 
than for more “wired” technologies like broadband.  Also entrepreneurs 
are able to get a quicker return on investment and there are no 
entrenched “incumbents” that might prevent progress.

On capacity building, it was noted that there was need for more policy 
advice for developing countries.  Another member commented that there 
was much expertise in the South, and that South-south cooperation would 
be beneficial as well as North-South capacity building.

There was the suggestion of a “virtual financing facility” by Willie 
Currie of APC.  He noted that such a facility could enable financing of 
the backbone as a “global public good” by coordinating better the 
activities of existing funds as well as providing policy advice and 
capacity-building.

Currie also suggested that given the success of many Universal Access 
Funds at the national level, a “Global Universal Access Fund” should be 
considered as an option.

There were no major agreement on recommendations in this area, however 
among the general conclusions it was agreed that there needed to be 
more funding for the “backbone.” It was noted that FDI (foreign direct 
investment) was not as important as local investment and south-south 
investment.

One member commented that we can not conclude the “inadequacy” of 
existing funding mechanisms since existing mechanisms are not being 
“fully exploited.”

There was much discussion about the role of the public sector.  Among 
the comments were that the public sector steps in where the market 
fails or where market “gaps” appear.  Another comment was that the key 
role of the public sector is to reduce access costs to increase entry 
and competition among private sector actors.  There was general 
agreement that the government should avoid becoming a state provider of 
access, i.e. similar to giant national public telecoms, and instead 
deregulate and liberalize the ICT sector to encourage competition.


CONTENT AND APPLICATIONS ISSUES
The afternoon discussion moved on the content and applications issues 
related to financing.  In general it was agreed that these issues can 
not be seperated from access issues, and that they were synergistically 
related.  I.e. content spurs demand for access and access is a 
pre-requesite for content being created.

Several members shared their experiences in Azerbaijan, Egypt, Somoa 
and Estonia on developing content and enabling access.  Several 
emphasized that government can play a proactive role by encouraging 
local content in local languages and keeping the cost of access as low 
as possible.

Beyond national strategies, the Task Force discussed international 
measures to support local content and e-services like e-government.  
There was the suggestion that a mixed funding strategy could be 
coordinated, i.e. combining World Bank funding for policy reform with a 
grant to develop local content and funding to develop e-services like 
telecenters.

There was a discussion of the cost of content as an important factor.  
I.e. who pays? And is content a “global public good”?  A number of 
examples were given, such as medical journals being made available 
online for free and MIT making its course curricula available on the 
web.  This evolved into a discussion on open source software, where 
there was disagreement on what the Task Force could recommend.  Several 
members favored a technology-neutral stance.  Others noted that value 
of different governments, national to municipal, cooperating in 
purchasing together the same software package to save costs and 
duplication of effort.


DIGITAL SOLIDARITY FUND
There was a discussion on the relationship of the Digital Solidarity 
Fund to the TFFM.  It was reported that the DSF was incorporated as a 
foundation under Swiss law and has received some support from 
municipalities and other donors.  There will be some mention of the DSF 
in the report of the TFFM, but will be short of an endorsement or a 
recommendation.



===============================================
RIK PANGANIBAN       Communications Coordinator
Conference of NGOs in Consultative Relationship with the United Nations 
(CONGO)
web: http://www.ngocongo.org
email: rik.panganiban at ngocongo.org
mobile: (+1) 917-710-5524

** Please note CONGO's new mailing address: CP 50, 1211 Genéve 20, 
Switzerland.  Our physical office address is 11, Avenue De La Paix, 1st 
Floor, 1202 Genéve, Switzerland. **
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