Closing the digital divide with universal service leadership

Until 2009, Costa Rica’s state-owned monopoly, the Instituto Costarricense de Electricidad, controlled all of the island nation’s telecommunications services. This monopoly ended when the Central American Free Trade Agreement came into force and opened up the country’s telecommunications sector to competition. A universal access fund for telecommunications, FONATEL, was also established in 2009 with the mandate to help bring telecommunications services to people and areas of the country that were hardest to reach.

A 2010 ruling by the country’s Constitutional Court effectively positioned internet access as a human right. After this time, a number of policies were written to support the building of an information society and the government adopted digital inclusion as a top priority to empower citizens to actively contribute to the nation’s development.

By 2012, 93% of Costa Ricans had mobile phone access, yet only 43.7% had access to the internet. Three years later, a 2015 national household survey revealed that just 49.4% of the population (5 million people) were internet users. One reason for the lack of progress on access was that despite the introduction of competition to help reduce prices, devices and service costs were still too expensive for the country’s poorest households. Beyond those dealing with poverty, indigenous people, female-headed households, and self-employed persons experienced high levels of digital exclusion. Furthermore, while FONATEL was responsible for connecting those not connected, it struggled to coordinate with the necessary range of government bodies, including SUTEL, the regulator; the Ministry of Science, Technology, and Telecommunications; and the Ministry of Public Education.

With progress on connectivity stalling, renewed attention was given to the importance of delivering universal access for all citizens. This culminated in the launch of CR Digital, a national plan designed to connect the whole country to the internet within two years. Through this plan, FONATEL received an injection of an additional $300 million dollars and was designated the lead organisation for the five-phase plan.

The first phase of this plan, Comunidades Conectadas, involved connecting communities  through schools and community centers then lacking access. The second phase, Hogares Conectados, or connected homes, focused on providing every Costa Rican household with fixed-line internet access and devices needed to get online and use the internet. Families eligible for the program typically include those who are poor, indigenous, disabled, elderly, or low-income entrepreneurs.

FONATEL subsidizes the cost of internet connections (up to 80%) and laptop purchases (up to 100%) for families who qualify for support, based on their household finances. Program beneficiaries can visit participating service providers and the head of household signs a contract to receive their connection and equipment. After the subsidies are taken into account, families are expected to cover the remaining costs.

As it falls under social policy, Hogares Conectados is coordinated by the Presidential Social Council, which is organized by the Vice President of Costa Rica. Since the program launched, private sector and civil society stakeholders have run activities, funded by FONATEL, to build awareness of the benefits of internet access, facilitate training to develop digital literacy, and show how everyday citizens can interact with their government.

Though Costa Rica missed its two-year target for connecting the entire country, Hogares Conectados, and CR Digital more broadly, continues to make headway for the inclusion of all Costa Ricans.

In 2018, the success of the well-managed program resulted in two further private sector players, Claro and Cable Vision, joining Hogares Conectados. This brought the total number of participating service providers to nine. By the time they joined, the program had brought almost 40,000 families online. Around 400 rural educational institutions had also received an internet connection and reported that access has helped streamline their administrative work and provide classrooms with innovative instructional materials.

It was also found that a cost-sharing approach to subsidies encouraged families to take excellent care of their ICT equipment since they were effectively part owners. Approximately 95% of the families who have participated in the program to date are female-headed households, meaning that more women than before — especially those in rural areas — are benefiting from this plan.

Suggested Citation: Alliance for Affordable Internet (2019). “Costa Rica: Closing the digital divide with universal service leadership.” Good Practices Database. Washington DC: Web Foundation.