Finance negotiations slow down, but agreement on Digital Solidarity Fund
  Conflicts range from Free Software to debt swapping
  23 February 2005. The governmental discussions on financing ICT for Development are still going on. Conflicts range from Free Software and interconnection fees to debts. An easy solution is not in sight anymore, but an early agreement was reached on the Digital Solidarity Fund.

Yesterday, the PrepCom has already extended its negotiations until far beyond 22:00 in the evening without even touching on the Digital Solidarity Fund (DSF). Today, the plenary has started to discuss the general chapters of the Political Chapeau, while another drafting committee continued the finance discussions. After the first few days, when the negotiations went on pretty quickly and developing countries were happy to see things move in their favour, the EU and other Northern governments have started to use procedural tricks to slow down the process. The chapter two of the Operational Part of the draft summit declaration is now full of square brackets.

Among the contested points were:

Free and Open Source Software
This had already been recommended as a means to reduce costs for ICT and to contribute to development by Shoji Nishimoto (UNDP), when he summarized the report of the Task Force on Financing Mechanisms at the first day of the PrepCom. The discussion now centred mainly on the so-called "technological neutrality" emphasized by the United States, while Brazil asked for only supporting Free and Open Source Software. The negotiation has led to bizarre results already. The delegation of Azerbaijan suggested the formulation "free and low cost proprietary and open source software". Further drafting is taking place in a small subgroup chaired by Barbados, but the US and some other delegations could not agree to anything today before asking their capitols.

Debt relief and debt swapping
The Canadian government was opposing this as a means to help the "ICT for Development" agenda. In their view, it is a mechanism for poverty reduction and should not be used for infrastructure roll-out. Developing countries definitely want to use this instrument here. In their view it is an established mechanism elsewhere, so it can also be used in the WSIS context. The EU and Japan somewhat took the middle ground and tried to agree to this argument, but with more moderate language.

Interconnection fees and access
A key issue in the discussion was once where the burden of cost reduction should be placed. Backbone providers are in many instances American companies, therefore the US quite naturally opposes anything which will impose on their private enterprises. Brazil on the other side asked for the reduction of Internet interconnection costs, which are currently developed only on the market. On a similar matter, an ITU working group had tried for a while to reach an agreement on international telephone interconnection costs, without being able to reach any agreement. Agreed proposals here in the PrepCom included the recognition of financial needs for "regional backbone infrastructure, regional networks, regional access points (.) to link across borders and in economically-disadvantaged regions". An agreement is not in sight yet.

Deadlines for implementation
Like the Geneva Plan of Action, the first draft of the Operational Part contained language for a deadline for the implementation of the financial decisions by the Tunis summit. Though the deadline itself was open (the wording was "until 200X"), a number of governments objected to the general idea. New Zealand questioned if there could seriously be any end to the improvement and adaptation of the financial mechanisms. Some developing countries challenged this view, because they wanted a clear signal for the seriousness of the implementation. In the end, though, any reference to deadlines was deleted.

Digital Solidarity Fund
The biggest surprise of the day was a compromise on an issue that had almost brought the first WSIS to a breakdown. The governments agreed on paragraph 27 about the "Digital Solidarity Fund" after only two hours of discussion. They now "welcome" the DSF "as an innovative financial mechanism of a voluntary nature open to interested stakeholders". The declaration now emphasizes that the "DSF will complement existing mechanisms for funding" while "focusing mainly on specific and urgent needs at the local level." There was some discussion about where the money raised by the fund should be spent (in the "developing world" or also in "countries in transition"), but this will certainly not endanger the fundamental compromise.

The compromise became possible because of earlier consultations the EU had with the Senegalese government, who had originally suggested this fund in the first phase of WSIS. It is mainly meant as a demonstration of good will, which is clearly demonstrated by the fact that the word "voluntary" appears two times in the first sentence. This agreement, though there is no binding language in it, is still a success for the developing world and the civil society groups active here. They had challenged the general view (and the findings of the TFFM) that new financial mechanisms are not needed. The agreement of the new DSF certainly is a strong signal in the opposite direction.


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