At this second Preparatory Committee of phase 2 of the World Summit on
the Information Society, the central issue for debate among governments
is that of Financial Mechanisms for ICT Development, which the
organizers are hoping to bring to a conclusion tonight. There is little
indication that much new will come out of the document on this issue.
Governments seem set to accept a compromise agreement worked out between
Ghana and the European Union, that essentially states that they
"welcome" the voluntary Digital Solidarity Fund established in Geneva at
the first WSIS (December 2003), that was set up, not by states, but by
local governments, on the initiative of Geneva and Lyon.

Southern governments were highly dissatisfied, at that time, with the
refusal of Northern governments to commit money to the implementation of
the WSIS Action Plan, or even express support for a voluntary plan.
Under pressure, they reluctantly agreed only to set up a task force to
"review the adequacy" of funding mechanisms. This multi-stakeholder
body operated for two months, under leadership of UNDP.

The task force decided to limit its mandate to examining existing
funding mechanisms, declining to look into new options. It also
pointed to new trends and identified some areas where present mechanisms
fail to "meet the challenges of ICT for development". The latter
include capacity-building programs, communications access in remote
areas, regional backbone infrastructure, affordable broadband access,
coordinated assistance for small islands and countries, and integration
of ICT (information and communications technology) into the development
sector in areas such as health, education and poverty reduction.

At this Prepcom, G8 governments have maintained their refusal to commit
to any new funding and only acceded to "welcoming" the voluntary DSF.
The WSIS Geneva Declaration and Action Plan emphasize that development
aid in the area of ICTs should mainly be channelled towards fulfilment
of the Millennium Development Goals (MDGs), since ICTs can be a
development enabler, (for example, by generating better ability to
access key information and crucial communications needs). The refusal
to allocate new financing mechanisms could mean that the onus of ICT
development funding will shift to existing MDG funds, in competition
with other more urgent development goals such as heath and clean water.

Meanwhile, the Grulac group (Latin American and Caribbean governments)
has expressed reserves about welcoming the Fund, due to lack of clarity
about its mechanisms and how it will benefit their region. Other issues
still under debate among governments include recognition of the limits
of private investment, particularly in services to rural areas and
disadvantaged populations, and the crucial role of public finance in
such areas. And there is strong disagreement on the terms in which to
refer to public regulation (or its removal) and/or public policy to
encourage investment in the telecommunications area.

It appears probable that references will be included to supporting
community-based initiatives and to promoting awareness (or use of) free
and open source software: both civil society priorities. References
have also been included to financing needs for developing content and
applications, and to including broadcast radio and TV in national
development strategies.

A weak report

Many civil society actors consider the Task Force report could have been
much more specific and forceful. Task force member William Currie, of
the Association for Progressive Communications (APC), in an interview
with ALAI, expressed particular disappointment in the slack attitude of
the Brazilian and Senegalese governments, which failed to bring in to
the task force any sustained arguments or supporting data, to bolster up
the original proposal of a fully fledged international development fund,
despite Senegal being one of its main proponents at the 1st WSIS. Both
Africa and Latin America have the expertise within civil society, yet
these governments failed to tap this expertise, lamented Currie.

Digital Solidarity Fund executive secretary, Alain Clerc, is not so
concerned about the lack of a more specific commitment by WSIS itself,
however. In an interview, he expresses that while the WSIS support for
the Fund will an important aid, the main virtue of the DSF is the
novelty of the proposed funding mechanism itself: already some 120 local
governments have voluntarily committed to including a 1% levy on all
public bids for electronic infrastructure or service projects, to be
paid by the vendor out of its profit margin. Other local and national
governments, as well as private companies, are being invited to join.

It is proposed that the Fund, which will be officially launched in March
in Geneva, will allocate 60% of its subsidies to less developed
countries, 30% to developing countries and 10% to transitional or
industrialized states. By recognizing the fund, governments will have
the opportunity to be represented on the decision-making mechanism, on
which is proposed to include at least three members from each of the
five regions of the globe, and from different sectors (government, civil
society or local government, and the private sector). According to
Clerc, community initiatives with multi-stakeholder participation will
be one of the main funding priorities.